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Economy

Australia central bank to trim bond buying despite delta COVID risk

Hawkish decision surprises markets but RBA sees virus pressure as temporary

The RBA affirmed its decision to trim purchases of government bonds to AU$4 billion a week from September, from the current weekly pace of AU$5 billion.   © Reuters

SYDNEY (Reuters) -- Australia's central bank surprised markets on Tuesday by standing its ground on a decision to taper its bond buying program from September, expecting the hit to the economy from the delta variant of the coronavirus to be temporary.

The Reserve Bank of Australia (RBA) kept its cash rate at 0.1% for its eighth straight meeting, in a widely expected move. It reiterated interest rates will not be raised until inflation was sustainably within its 2-3% target band, a goal unlikely to be met before 2024.

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