At its 7 August meeting, the Reserve Bank of Australia (RBA) left the cash rate unchanged at 3.50%, in a decision that was largely expected by market analysts. The RBA continues to see signs of moderation in the global outlook, amid slower growth in China and the United States and contracting economic activity in Europe, as a result of the exacerbation of the debt crisis. At a domestic level, "most indicators suggest growth close to trend overall", while the labour market continues to show positive signs. Regarding price developments, the pace of growth in consumer prices continues to moderate, with inflation hitting a 13-year low in the second quarter. According to the RBA, the impact of the carbon pricing scheme - approved at the end of last year and effective since 1 July - will begin to push up inflation over the next couple of quarters. However, the Bank maintains the view that inflation will be in line with its 2.0% - 3.0% target range over both this year and next. Finally, monetary authorities reaffirmed that the monetary policy stance remains appropriate. The phrasing of the final statement was unchanged from last month and kept the reference to the subdued international outlook, confirming that the RBA is likely to maintain a wait-and-see approach in the coming months and gauge the impact of global developments on the Australian economy before cutting interest rates further.
Australia Monetary Policy
RBA maintains wait-and-see approach
August 7, 2012
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Australia Monetary Policy Chart
Note: RBA Cash Rate in %.
Source: Reserve Bank of Australia (RBA).
Australia Economic News
October 12, 2016
The Westpac-Melbourne Institute Survey of Consumer Sentiment increased 1.1% in October as the index rose from September’s 101.4 to 102.4.
October 11, 2016
The business confidence index published by the National Australia Bank (NAB) was stable in September at August’s 6 points.
October 5, 2016
Nominal retail sales inched up 0.4% in August from the previous month in seasonally-adjusted terms, up from July’s flat reading.
October 4, 2016
At its 4 October monetary policy meeting, the Reserve Bank of Australia (RBA) kept its policy rate steady at an all-time low of 1.50% after cutting its rate by 25 basis points twice this year, once in May and once in August.
September 15, 2016
The labor market lost 3,900 net new jobs in August compared to the previous month in seasonally-adjusted terms.