The Reserve Bank of Australia has held the cash rate at a record low 0.75 per cent, as widely expected by economists.
The central bank board’s first interest rate decision for 2020 was to delay cutting to a fresh record low 0.5 per cent, despite new economic hurdles emerging over a turbulent summer.
Market expectations of a February cut had evaporated from rusted-on certainty in October to an outside chance following a bump in quarterly inflation and improved employment figures last week.
However, disappointing third-quarter GDP figures, underwhelming retail data, a bushfire emergency and the outbreak of the coronavirus have added pressure on the economy since the board’s December meeting, with economists expecting the RBA to downgrade its forecasts accordingly in Friday’s Statement on Monetary Policy.
The Australian dollar climbed from 66.85 US cents to 67.14 US cents within five minutes of the RBA’s 1430 AEDT decision on Tuesday.