Australia’s economy is experiencing the biggest contraction since the 1930s but it is possible the downturn could be shallower than expected, the Reserve Bank says.

However, the outlook remains highly uncertain and the coronavirus pandemic is likely to have long-lasting effects on the economy, according to the central bank’s June board meeting minutes released on Tuesday.

The RBA kept the cash rate at a record low 0.25 per cent at the monthly meeting while assessing the extent of the coronavirus-driven economic downturn.

It had cut rates twice and announced quantitative easing measures in March in an effort to cushion the economy from the impact of the pandemic.

According to the minutes, the RBA board recognised the substantial, co-ordinated and unprecedented easing of fiscal and monetary policy in Australia was helping the economy through this difficult period.

Its actions were keeping funding costs low and supporting the supply of credit to households and businesses.

It was likely this fiscal and monetary support would be required for some time, it said, and pledged to maintain the accommodative approach as long as required.