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Australian Dollar Down as the RBA Rules Out Rate Hikes Until 2024

20 September 2021

The Australian Dollar turned lower as the Reserve Bank of Australia (RBA) struck an unmistakably dovish tone with June’s monetary policy announcement. Governor Philip Lowe and company said the conditions for an interest rate rise are unlikely to be met until 2024 at the earliest.

In the statement accompanying the rate decision, the central bank said that it places a high priority on a return to full employment. It acknowledged that economic recovery has been stronger than expected but warned that the prospect of new Covid-19 outbreaks is an ongoing uncertainty.

The official cash rate and the 3-year yield targets were left unchanged at 0.10% respectively, as widely expected. Policymakers flagged the July meeting as a time when the yield objective as well as further QE asset purchases will be considered.