Policymakers of the Reserve Bank of Australia said further easing of monetary policy would gain more traction than earlier as the economy reopens up.
At the monetary policy meeting held in October, board members observed that some parts of the transmission of easier monetary policy had been impaired as a result of the restrictions on activity in parts of the economy.
But with the opening up of the economy, monetary policy is set to gain more traction than before, the board noted.
At the meeting, the bank had decided to maintain cash rate and the targeted yield on three-year government bonds of 25 basis points.
The board viewed addressing the high rate of unemployment as an important national priority.
Members recognized that while inflation can move up and down for a range of reasons, achieving inflation consistent with the target is likely to require a return to a tight labor market.
Regarding the nature of the forward guidance, the board said it would not raise the cash rate until progress is being made towards full employment and it is confidence that inflation will be sustainably within the 2-3 percent target band.
The Board agreed to place more weight on actual, not forecast, inflation in its decision-making, given the higher level of uncertainty.
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