SYDNEY, June 2 (Xinhua) -- Australia's official interest rate remained on hold at 0.25 percent on Tuesday, following the June monthly meeting of the country's central bank.
The Reserve Bank of Australia (RBA) took a cautious approach, as was expected by most economic observers in the midst of COVID-19 volatility.
Governor of the RBA, Philip Lowe explained that while Australia's economy was going through a very difficult period, it is possible the downturn may not be as severe as initially expected.
"Over the past month, infection rates have declined in many countries and there has been some easing of restrictions on activity. If this continues, a recovery in the global economy will get under way, supported by both the large fiscal packages and the significant easing in monetary policies," Lowe said.
"Globally, conditions in financial markets have continued to improve, although conditions in some markets remain fragile. Volatility has declined and credit markets have progressively opened to more firms."
The decision came amid renewed suggestions that Australia could be headed for a negative interest rate as, was already the case in the European Union, Japan and a handful of other countries.
Lowe however, has remained resistant to the idea and instead encouraged government fiscal stimulus to help the economy recover. Enditem