SYDNEY, Feb 2 Reuters Australias central bank held rates at nearzero in a widely expected decision on Tuesday and said it would expand its bond buying programme by A100 billion 76.4 billionfrom midApril to help support jobs and boost inflation.
At its first policy meeting of the year, the Reserve Bank of Australia RBA left its cash rate and the threeyear government bond yield target at 0.1 while reiterating its commitment to not raise rates until actual inflation is within its 23 target range.
The pledge to buy more bonds pulled yields on 10year paper back to 1.115, having hit a 10month top of 1.19 early in the session.
The Board remains committed to maintaining highly supportive monetary conditions until its goals are achieved. Given the current outlook for inflation and jobs, this is still some way off, Governor Philip Lowe said in a short postmeeting statement.
For the RBA to meet its inflation target, wages growth will have to be materially higher than the 1.4 rate currently, he added.
This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest, the RBA chief said.
Overall, Lowe sounded optimistic about Australias economic recovery as most businesses reopened after the country largely managed to curbed the coronavirus pandemic.
The Australian dollar eased to 0.7628 after the statement from 0.7660 earlier in the day.
The RBA expects Australias gross…