(Bloomberg) — Australia’s central bank kept its monetary settings unchanged at the final meeting of the year and highlighted emerging risks to the recovery from the omicron strain of coronavirus that further supports its dovish stance.

According to the Reserve Bank, its key interest rate remained at 0.1%. This is because accommodative policies are still necessary to keep unemployment down enough to increase wages. It reiterated that it won’t hike until inflation is well within the central bank’s 2-3% target, a goal it believes is unlikely to be achieved for about two years.

The RBA’s caution highlights the economic uncertainties of living with Covid-19, with omicron coming to light just as Australia’s economy emerged from protracted lockdowns. Although restaurants have resumed serving customers, domestic travel is being resumed. However, lockdown risks continue to be a concern.

“The emergence of the Omicron strain is a new source of uncertainty, but it is not expected to derail the recovery,” Governor Philip Lowe said in a statement.

The Australian dollar was unchanged after the decision. It traded at 70.58 U.S.cents in Sydney at 2.35 p.m.

Economists say it’s still too early to assess the economic implications of omicron. Markets are undeterred and are also discounting Lowe’s (NYSE:) argument that Australia doesn’t face the same price pressures that are emerging in the U.S., U.K. and New Zealand.

The rate will rise by 15 basis points in May 2022, and then two quarter-point increases over the remainder of the year. There is a possibility of a third increase. This optimism is based on strong data, including high household spending and job vacancies.

Figures on Monday, though, highlight the RBA’s view: a closely-watched gauge of Australian job vacancies surged in November to be a record 44.2% above its pre-pandemic level, while a measure of inflation showed price pressures remained subdued.

Following today’s no-change decision, investor focus will shift to the RBA’s next meeting in February, when the board reviews its A$4 billion ($2.8 billion) a week bond buying program after last month dropping its yield target. 

“In reaching its decision in February, the Board will be guided by the same three considerations that it has used from the outset of the program: the actions of other central banks; how the Australian bond market is functioning; and, most importantly, the actual and expected progress towards the goals of full employment and inflation consistent with the target,” it said in the statement Tuesday. 

The majority of economists predict that the RBA will cut its purchases, and others believe it may scrap the whole program. In the face of decreasing government issuance, bond traders have already signaled that they will stop quantitative easing. An expected acceleration in tapering by the Federal Reserve in the face of surging U.S. inflation will also be influential in Lowe’s thinking.

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