Australian central bank keeps interest rate on hold at 0.25 pct

SYDNEY, Sept. 1 (Xinhua) -- The Reserve Bank of Australia (RBA) moved to keep the country's official interest at 0.25 percent during its monthly meeting on Tuesday.

Australia's interest rate has remained on hold since March when it was slashed to the historic low at an emergency meeting in response to the COVID-19 pandemic.

RBA Governor Philip Lowe has on a number of occasions described the move to a negative interest rate as highly unlikely.

Meanwhile, RBA officials decided to extend a term funding facility, which to date banks have drawn over 50 billion Australian dollars from (37 billion U.S. dollars).

The move extends the money on offer to authorised deposit-taking institutions (ADIs) to 200 billion Australian dollars (148 billion U.S. dollars), at a fixed rate of 0.25 percent for three years.

"This will help keep interest rates low for borrowers and support the provision of credit by providing authorised deposit-taking institutions greater confidence about continued access to low-cost funding," Lowe said.

On Wednesday, Australia's economic results for the June quarter are set to be released, with economists predicting a significant contraction in gross domestic product (GDP).

Any contraction would mark Australia's first official recession in three decades, made worse by a second wave of infections in the state of Victoria, which as of Tuesday had spent over a month in strict lockdown.