The S&P/ASX200 closed 0.62 per cent lower at 6004.8 while the All Ordinaries Index dipped 0.57 per cent to 6144.9.

The RBA monetary policy statement released on Friday estimates that rather than rebounding at a 7 per cent rate in the year to June, Australia’s economic recovery will be more like 4 per cent.

“They have ratcheted that in quite substantially,” CommSec market analyst Tom Piotrowski said.

“This has obviously got a lot to do with developments in Victoria in relation to one-quarter of the economy being shut down through its latest initiatives to control the coronavirus.”

The RBA also predicted unemployment may still be around 8.5 per cent by the end of 2021, rather than 7.5 per cent.

The big four banks came under pressure in intraday trade, with National Australia Bank closing 0.35 per cent softer at $16.98 and Commonwealth Bank down the same amount to $71.46, but ANZ closed 0.23 per cent higher at $17.68 while Westpac finished flat at $16.76.

Major iron ore miners enjoyed strong share price growth in recent months as the iron ore price rose above $US100 a tonne but lost ground to consolidation, Mr Piotrowski said, with Rio Tinto down almost 3 per cent to $102.35, BHP Billiton easing 1.37 per cent to $39.28 and Fortescue shedding 2.2 per cent to $18.16.

Consolidation also explained why Newcrest was 1.9 per cent softer at $36.10 and fellow gold miner Silver Lake Resources dropped more than 3 per cent to $2.53, while the price for the precious metal hovered around record levels.

4D Medical, which aims to commercialise its patented respiratory imaging technology, made a stellar stock market debut after raising more than $55 million through its 73 cents per share initial public offering, closing at $1.59.

Diversified conglomerate Wesfarmers was down 7 cents at $46.10 while airline Qantas was flat at $3.31.

The Aussie dollar was fetching 72.12 US cents, 54.92 British pence and 60.86 Euro cents at 4.30pm AEST.