Despite growing inflation, Australia’s central bank ended multibillion-dollar pandemic stimulus on Tuesday, but kept interest rates at a record low.
The Reserve Bank of Australia announced on February 10 that it would end its historic Aus$350 billion (US$250 billion) bond-buying program as the economy shows signs of recovery from the Covid-19 crisis.
However, it did not totally slam the brakes on stimulus, deferring an interest rate hike for the time being.
Bank president Philip Lowe said Tuesday that borrowing will remain at 0.1 percent “until real inflation is sustainably within the two to three percent target range.”
The RBA’s bond-buying scheme, which began in late 2020 and ended in late 2021, saw the RBA inject Aus$4 billion into government bonds every week to keep the economy afloat throughout the pandemic.
Lowe cited Australia’s solid employment data and other domestic indications in making the decision to cancel the plan.
