14 OCTOBER 2020
The RBA does not expect to be increasing the cash rate for at least three years, Dr Philip Lowe, the RBA governor advised today.
The governor advised the board had pivoted its view on the timing vis a vis its inflation and full employment settings.
Lowe advised the central bank will now be putting a greater weight on actual, not forecast, inflation.
"We do not expect to be increasing the cash rate for at least three years," he advised in a speech dubbed The recovery from a very uneven recession.
"Over recent months, our communication has stated that the Board will ‘not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band’.
"It might seem strange to some that we are even talking about the day that interest rates increase, given that it is a long way off. But expectations about future interest rates affect people's decisions and asset pricing, so we seek to be as transparent as we reasonably can.