SYDNEY, March 2 Reuters Australias central bank on Tuesday affirmed its pledge to keep interest rates at historic lows as policymakers battle to stop surging bond yields disrupting the countrys surprisingly strong economic recovery.

Concluding its March board meeting, the Reserve Bank of Australia RBA kept rates at 0.1 and committed to maintaining its highly supportive monetary conditions until its employment and inflation goals are met.

Global bond markets have sold off heavily in recent days on speculation the massive monetary stimulus will soon end as economies emerge from the pandemicinduced recession.

On Tuesday, Governor Philip Lowe said he did not expect to meet the RBAs inflation and employment objectives until 2024, signalling the cash rate will stay at 0.1 for a long time to come.

Despite that commitment, Australian bonds sold off with the 10year futures contract implying an yield of 1.72 compared with 1.66 on Monday.

The local dollar, which has traded near a threeyear high, pared some of its losses and was at 0.7762, up from as low as 0.7737 earlier in the day.

Economists at the Commonwealth Bank of Australia CBA expect the RBA to abandon its threeyear yield curve control YCC target in the secondhalf of this year while retaining its flexibility to purchase bonds at the longerend of the curve.

We continue to believe that the ongoing improvement in the domestic economic data will ultimately force the RBAs hand to do something about YCC later this year,…