RBA holds steady ahead of grim GDP figures

PHOTO: The Reserve Bank of Australia governor Philip Lowe has made its official interest rate decision for September. Images: Getty

The Reserve Bank of Australia (RBA) has kept the official cash rate at its record low 0.25 per cent in its monthly board meeting.

It comes ahead of Wednesday’s national accounts figures for the June quarter, with economists predicting a 6 per cent contraction in Gross Domestic Product (GDP). That would mark the largest contraction since the Australian Bureau of Statistics began measuring in the 1950s, and reflect the beginning of the first recession in nearly three decades.

The RBA first cut interest rates to their record low in March, with governor Philip Lowe saying the bank is unlikely to take rates any lower.

“Relatively speaking, the economic fallout of the coronavirus that is reverberating around global markets has not impacted Australia as hard as many other nations. Even considering Victoria’s second wave and the potential for subsequent outbreaks elsewhere, employment figures are encouraging and other key indicators point to our economy’s overall resilience,” Laing+Simmons’ managing director Leanne Pilkington said in the Finder RBA interest rate survey.

“Low, steady interest rates for the foreseeable future are appropriate to support the recovery.”