The Reserve Bank of Australia (RBA) has maintained the cash interest rate at two percent. During its board meeting today, Reserve Bank Governor Glenn Stevens noted that as the economy is growing at below the long-term averages, their monetary policy needs to be “accommodative.” He added that the board will continue to assess the economic outlook.
This record low interest rate has been kept steady for the sixth month in a row and is expected to be maintained until the first half of 2016.
Amid the lower Australian dollar, the Reserve Bank has been working to cushion the economy without having to further reduce the current interest rate. Central banks worldwide have recently made reference to the volatility on global markets.
The statement issued by the board today was said to be quite similar to last month’s noting that “the U.S. Federal Reserve could be expected to increase rates in the period ahead.”
Earlier, most economists surveyed by Bloomberg expected the cash rate to remain on hold going into 2016. Financial markets, meanwhile, were expecting a cut below the current two percent taking the rate to a new record low of 1.5 percent. Citi, for its part, expects a rate cut to take place in November.
Last month, RBA Governor Glenn Stevens maintained rates at the current level noting that the falling Australian dollar provided the loosening fiscal impacts required.
The Australian dollar also showed more strength today. It was trading at 70.86 US cents, up from the previous day’s 70.68 cents.
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By Wendy Chamberlain
Copyright 2015 | All Rights Reserved
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With a passion for all things real estate spanning 18 years, Wendy loves that her role as a
