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Australia’s economy may contract significantly, according to the minutes of the meeting released by Australia’s central bank on Tuesday. The sharp economic reversal is expected to occur in the latter part of the second quarter and may continue fluctuating up until September due to damages brought by the virus contagion.
The Reserve Bank of Australia retained April’s cash rate at 0.25% and pledged to do the necessary measures to maintain the current level of three-year government bond yields.
The minutes also showed that RBA’s board members were able to discuss matters regarding deferrals and cancellations of business investment plans. The pandemic is likely to drag the household consumption to new depths while services export would struggle for months since current virus restrictions are yet to be lifted.