RBA August 2020 Decision - Interest Rates Maintained

Once again interest rates in Australia have been maintained at 0.25%. Although Victoria is going through a tough time with the coronavirus, the RBA aren’t cutting rates any further. According to this article by Gareth Hutchens for ABC News:

Last month, Reserve Bank governor Philip Lowe raised the prospect of cutting rates further if necessary, perhaps to 0.1 per cent, but the board held off on taking further action at today's meeting.

Interesting, however, I haven’t seen this reported before and there’s no mention of any of this kind of thinking in Philip Lowe’s official statement last month or this month. He acknowledges the impact that coronavirus is having on the Victorian economy and that the Australian economy is “experiencing the biggest contraction since the 1930s” but points out that “the downturn is not as severe as earlier expected and a recovery is now underway in most of Australia”.

Since action wasn’t taken this month even amongst the startling number of cases in Victoria over the past week, it seems unlikely that rates will be cut any further. But who knows what to expect? Six weeks ago the situation was looking so much better on the coronavirus front.