Australia: RBA leaves rates on hold for fifth consecutive meeting
May 3, 2011
The Reserve Bank of Australia (RBA) left the cash rate unchanged at 4.75% at its meeting on 3 May, in a decision that was widely expected by market analysts. The decision marked the fifth consecutive meeting that monetary authorities maintained existing rates. In the accompanying statement, monetary authorities provided an upbeat assessment of the Australian economy. The RBA acknowledged that natural disasters at the beginning of this year have slowed activity, particularly in key sectors like mining. However, the Bank is confident that activity will recover going forward as rebuilding efforts get under way and sees economic growth to be at trend or higher over the medium term. The RBA expects that CPI inflation will be close to target over the year ahead, as prices pressures in the agricultural sector - in the wake of the Yasi cyclone will ease going forward. Therefore, the RBA maintains that the current monetary policy stance is appropriate in view of the general macroeconomic outlook.
Author: Armando Ciccarelli, Head of Data Solutions