The RBA decided in its February meeting to hold the cash rate steady at 0.75%, the same since October 2019. This is because the slowdown in global growth experienced at the end of last year seems to be easing. At the same time, however, the Australian economy remains highly vulnerable, with bushfires and the coronavirus epidemic threatening tourism and other industries.
Growth projections for the two upcoming years - 2.75% and 3% respectively - are a slight improvement over 2018 and 2019 growth. The RBA anticipates this improvement due to a lessening of trade-war tensions and other improvements in the global economy.
With the past months of falling interest rates, it has continued to support employment (fallen to 5.1%) and income growth in Australia. Indeed, the lower rate has placed downward pressure on the exchange rate which is in turn supporting a range of industries.
