Amid the ongoing uncertainty in Victoria, the Reserve Bank of Australia went ahead with its monetary policy decision on Tuesday. The central bank decided to keep rates near zero for the sixth time in a row. Such a decision is in line with the majority of analysts’ expectations.
On the other hand, it also resulted in a conservative fall of the local currency after hawkish expectations took hold of the driver’s seat for long. Both cash and three-year yield targets were steady at 0.10%, taking into account inflation and labor sector pressures.
The Australian economy is one of the quickest to revert to pre-pandemic growth compared to its developed nation counterparts for the record. However, home and commodity prices began to skyrocket in the past weeks. Thus, raising analysts’ concern about inflation. The trend has a greater chance of not becoming as temporary as experts think it is.
In a statement, some economists like the RBA’s latest decision. This is due to the need for greater institutional support in the country’s labor sector.
While there has been a significant improvement in the past, Australia’s unemployment rate remains one of the administration’s main concerns. Nevertheless, there has been a strong hiring and investment sentiment spotted in the past weeks.
Meanwhile, another source of apprehension started to reveal itself last week. The country’s important business districts, Melbourne and Victoria, battle an unprecedented rise in coronavirus cases.
The former spots another outbreak while the latter made a proactive stance and went ahead with a localized lockdown. Analysts believe that despite such roadblocks, the presence of vaccines, in which Australia made a significant advance, will offset the risk.
Victoria Lockdown Updates
Earlier on Tuesday, policymakers asserted no clear direction on the course of Victoria lockdown.
Analysts noted that the decision is crucial on either side: the economy and the risk of spreading the infection. With this, a thorough deliberation is being carried through. The state’s leaders called on citizens to exercise a greater deal of patience.
In a brief context, Victoria entered a localized restriction on May 27 and is originally due for expiration on Thursday, June 3. Such a curb emerged from the first reported local transmission of the virus in the last three months. This put seven million citizens back to the comforts of their homes.
With the high risk of transmission, the state’s Health Minister noted that there is still no final decision on whether to extend the lockdown or not.