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RBA Sees Economic Recovery Pushing Through Omicron Scare

Added 12-07-21 02:04:02am EST - “(Bloomberg) -- Australia's central bank left monetary settings unchanged, citing uncertainties from the omicron strain of the coronavirus while highlighting positive signs in the labor market and broader economy. Most Read from BloombergSand…” - News.yahoo.com

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Posted By TheNewsCommenter: From News.yahoo.com: “RBA Sees Economic Recovery Pushing Through Omicron Scare”. Below is an excerpt from the article.

(Bloomberg) -- Australia’s central bank left monetary settings unchanged, citing uncertainties from the omicron strain of the coronavirus while highlighting positive signs in the labor market and broader economy.

The Reserve Bank held its key interest rate at a record low 0.1% -- as expected -- saying accommodative policy is still needed to push unemployment low enough to drive wages higher. It reiterated that it won’t hike until inflation is well within the central bank’s 2-3% target.

The RBA was more upbeat on the economy’s prospects, saying omicron wasn’t expected to derail the recovery and predicted a return to the strong growth trajectory seen before recent lockdowns. Governor Philip Lowe noted high rates of vaccination as well as a solid rebound in household consumption.

The remarks helped push the local dollar higher to 70.82 U.S. cents. Sovereign bonds added to their declines, with three-year yields rising seven basis to 0.94% and 10-year yields climbing six basis points to 1.64%.

The governor’s upbeat statement has economists now seeing a greater chance the RBA will scrap its A$4 billion ($2.8 billion) a week quantitative easing program at the first meeting of 2022, when it’s due to be reviewed.

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