The Reserve Bank of Australia (RBA) has kept the official interest rate on hold at 0.25%.

The decision was largely expected on the same day that new data showed nearly one million Australians lost their jobs last month.

“The Board is committed to do what it can to support jobs, incomes and businesses during this difficult period and to make sure that Australia is well placed for the expected recovery,” Governor Philip Lowe said in his statement.

“The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3% target band,” he said.

With unemployment forecast to rise to 10% and the economy to contract by 6%, wiping $130 billion from it, such a scenario seems far off at best.

“The Australian economy is going through a very difficult period and there is considerable uncertainty about the outlook,” Lowe said.

“In [our] baseline scenario, output falls by around 10% over the first half of 2020 and by around 6% over the year as a whole. This is followed by a bounce-back of 6% next year.”

However, despite expecting the worst this year, the ever-upbeat RBA is considering every possible outcome.

“A stronger economic recovery is possible if there is further substantial progress in containing the coronavirus in the near term and there is a faster return to normal economic activity,” Lowe said.

But like others have, he cautioned restrictions should not be relaxed lightly.

“On the other hand, if the lifting of restrictions is delayed or the restrictions need to be reimposed or household and business confidence remains low, the outcomes would be even more challenging than those in the baseline scenario,” Lowe said.

He’ll have more to discuss when the RBA releases its monetary statement later this week.

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