Australia: RBA leaves rates unchanged for a sixth consecutive meeting
June 7, 2011
The Reserve Bank of Australia (RBA) left the cash rate unchanged at 4.75% at its meeting on 7 June, in a decision that was widely expected by market analysts. The decision marked the sixth consecutive meeting that monetary authorities maintained existing rates. In the accompanying statement, monetary authorities maintained an upbeat assessment of the current situation of the Australian economy. Despite the deceleration of economic activity in Q1, which came as a direct result of the natural disasters experienced at the beginning of the year, the Bank sees activity recovering going forward as rebuilding efforts get under way. The RBA maintains that economic growth will be at trend or higher over the medium term. The RBA believes that CPI inflation will be close to target over the next 12 months, as price pressures in the agricultural sector in the wake of the Yasi cyclone are expected to wane going forward. Therefore, the RBA believes the current mildly restrictive monetary policy stance is appropriate in view of the general macroeconomic outlook.
Author: Armando Ciccarelli, Head of Data Solutions