CANBERRA, AAP – MONETARY POLICY DECISIONS:

• Official cash rate unchanged at 0.1 per cent

• Three-year bond target unchanged at 0.1 per cent

• Economic recovery in Australia stronger than earlier expected and forecast to continue

• But inflation and wage outcomes remain subdued

• No cash rate rise until inflation is in the two to three per cent target range, which is not expected before 2024

• To meet the inflation target, the labour market must be tight enough to generate wages materially higher than it is currently

• Inflation set for spike to 3.5 per cent over the year to June but expected to be 1.5 per cent over 2021 and two per cent by mid-2023

• Reserve Bank remains committed to full employment and inflation target, requiring both to be met for any rate rise

• Bank carefully monitoring trends in housing borrowing with prices rising in all markets

• Board notes pick-up in housing demand from investors and wants lending standards maintained

• Bond purchase program playing an important role in supporting Australian economy

• Retains April 2024 bond for the yield target, not rolling it over to November 2024

• Will continue buying government bonds after completion of existing program in September

• Government bond purchases will be $4 billion a week until at least mid-November

• Next bond program review set for November, allowing an adjustment to stronger economic conditions

• Now closed Term Funding Facility expected to support low borrowing costs until mid-2024

• For providers of payments services, rate on exchange settlement balances unchanged at zero per cent