As widely expected by market analysts, the Reserve Bank of Australia (RBA) left the cash rate unchanged at 4.75% at its 4 October meeting. The decision marks the 10th consecutive meeting that monetary authorities have maintained rates. According to monetary authorities, the outlook at a global level remains subdued amid uncertainty regarding the resolution of the debt crisis in the Eurozone. However, prices for key export commodities remain strong, despite the moderation observed in recent months, and investment in the resources sector is picking up. On the other hand, a strong exchange rate and prudent household behaviour are having a noticeable dampening effect on economic activity. Consequently, the RBA believes that the pace of near-term growth is unlikely to be as strong as earlier expected. With regard to inflation, signs of underlying inflationary pressure showed an increase that was less sharp than initially indicated. Accordingly, the RBA believes that inflation is likely to be consistent with its 2-3% target over next year and the following. Finally, monetary authorities noted that an improved inflation outlook could provide the necessary scope for monetary policy to support demand if needed. While market analysts are uncertain regarding future RBA moves, many believe that this might signal a possible rate cut going forward, if global conditions were to deteriorate further.
Australia Monetary Policy
RBA on hold but hints at rate cut
October 4, 2011
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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.