The Reserve Bank of Australia kept official interest rates on hold at its September meeting this week. The cash rate remains at the historic low of 0.25%.

RBA governor Philip Lowe said they had decided to increase the size of its funding facility and extend its availability until late June 2021.

“Under the expanded Term Funding Facility, authorised deposit-taking institutions (ADIs) will have access to additional funding, equivalent to 2% of their outstanding credit, at a fixed rate of 25 basis points for three years,” he said.

“This extension will ensure that all ADIs continue to have access to the Term Funding Facility after the end of September, when the window for drawings under the initial allowance of 3% of outstanding credit closes.”

The Board has long said that economic recovery will depend on containment of the virus. While there were faint signs the economy could bounce back sooner rather than later, the Victoria outbreak has pushed those hopes further away.

In the baseline scenario considered by the Board, unemployment is expected to swell to 10% by the end of 2020 before settling at around 7% by 2022.

Lowe once again said the cash rate will remain at its current setting until progress is made “towards full employment and it is confident that inflation will be sustainably within the 2–3% target band”.

According to past statements, these conditions are unlikely to be met for at least three more years.