Regarding the state of Australia’s financial system, the bank’s board noted that it remains resilient.

So far this week, the Australian dollar has gained 0.10 percent against the US dollar, trying to recover from last week’s losses.

Reserve Bank Assistant Governor Chris Kent said on Monday that the expansion of balance sheets was adding monetary stimulus and that the current attempt to ease financial conditions was greater than during the 2008 financial crisis. He also said that given the current economic outlook and high unemployment, political support may be needed for some time.

Regarding employment levels, he said he wanted labor market conditions to match the bank’s target range of 2-3%. For this reason, the bank does not plan to increase the cash rate until the inflation rate is in the target range.

The Reserve Bank of Australia released its October minutes on Tuesday. The minutes said the bank’s board agreed to maintain the accommodation policy as long as needed. Committee members expressed optimism about the global economic outlook, noting that the economy is now gradually recovering.

However, they stressed that the continuation of this recovery depends on containing the Covid-19 pandemic, which has so far infected 41,487,185 individuals worldwide and killed 1,136,341. Australia has reported 27,458 cases and 905 deaths. Recently, the press reported that the Australian state of Victoria may have experienced the country’s first known covid-19 reinfection.

The bank’s board also discussed the possibility of introducing more easing measures to support the economy, which is now experiencing its worst slump since 1930. The Banking Council noted that the decline in the third quarter was smaller than expected and also more modest compared to the performance of other countries. They also highlighted that most of Australia is now experiencing an economic recovery, although in the state of Victoria (which has recently dealt with a sharp increase in the number of Covid-19 cases), the economic situation has been heavily affected by the restrictions.

As for the unemployment rate, they expect it to be high for an extended period of time, so addressing that issue is now a priority. The economic recovery is expected to be slow and uneven, with inflation expected to remain subdued, although they refuse to rely on their forecasts for decision-making.

Regarding the state of Australia’s financial system, the bank’s board noted that it remains resilient. If the sector shows signs of dysfunction, the bank is willing to make additional purchases of government securities.

Given the performance of the Australian dollar, the committee discussed the impact of larger balance sheet expansions (relative to the RBA) by other central banks contributing to lower government bond yields and their impact on the value of the Australian currency. They also discussed the bank’s future directions.

The Melbourne Institute released the Westpac Leading Index on Wednesday, which attempts to measure economic activity. The index was at 0.22 percent in September (month-on-month), after being at 0.49 percent the previous month. The Australian Bureau of Statistics said retail sales fell 1.5 percent after falling 4 percent in the previous month.