The Reserve Bank of Australia (RBA) today left its key interest rate unchanged at 0.1%, the lowest level on record.
Bank of Australia Governor Philip Lowe said that while the global economy is beginning to recover from the effects of Covid-19, the war in Ukraine has emerged as a new risk factor for the global economy, creating uncertainty.
“The global economy is continuing to recover from the pandemic. However, the war in Ukraine is a major new source of uncertainty. Inflation in parts of the world has increased sharply due to large increases in energy prices and disruptions to supply chains at a time of strong demand. The prices of many commodities have increased further due to the war in Ukraine,”
Lowe said.
In addition, the Australian economy remains resilient given a strong labor market and increased domestic spending. Investment in the corporate sector has also recovered.