Governor Philip Lowe said the nation’s economy remains “highly uncertain”.
Australia's official cash rate will remain on hold at the historic low of 0.25 per cent despite fears a second wave of COVID-19 will sweep the country.
The Reserve Bank of Australia today met to discuss the nation's interest rate, deciding to maintain its current policy settings.
Governor Philip Lowe said the global economy remains "highly uncertain" in the wake of COVID-19.
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"The global economy is experiencing a severe contraction as countries seek to contain the coronavirus. Even though the worst of this contraction has now passed, the outlook remains highly uncertain," Mr Lowe said in his monetary statement.
"The recovery is expected to be only gradual and its shape is dependent on containment of the virus.
"While infection rates have declined in some countries, they are still very high and rising in others."
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Graham Cooke, insights manager at Finder, said that Australia's economic fate rests on how well authorities can limit the spread of the virus.
"The virus situation has rapidly deteriorated since June," said Mr Cooke.
"As Melbourne enters a Stage 4 lockdown, businesses are once again bracing for restrictions and closures that will no doubt send economic shock waves across the country.
"Masks are now mandatory in Melbourne, and we're seeing more people covering their faces throughout Sydney."
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Eliza Owen, Head of Research at property research group CoreLogic, said that the RBA will likely turn to other measures than rates to ease the economic strain of COVID-19.
"With inflation sitting at -0.3 per cent in the year to June, the unemployment rate rising to 7.4 per cent, and a renewed round of restrictions across Victoria, a greater emphasis should be placed on fiscal measures to support an economic environment that is accommodative to growth," said Ms Owen.
"Considering the cash rate isn't likely to be reduced below its current setting, fiscal policies will be key to supporting economic activity through the pandemic."
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Source: 9News https://www.9news.com.au/national/australia-interest-rate-decision-august-during-coronavirus-pandemic/0953e802-34c5-4a7e-9b56-057811d01a75