RBA Cash Rate on hold
The Reserve Bank of Australia (RBA) has left the official cash rate on hold for the second consecutive month. At its board meeting earlier today, the Bank said it was prudent to leave the official cash rate at the current level of 2.50 per cent.
The decision to leave the cash rate was widely predicted, as consumer and business confidence edges higher and the real estate market continues to recover.
Some of their comments regarding the Australian economy:
"In Australia, the economy has been growing a bit below trend over the past year. This is expected to continue in the near term as the economy adjusts to lower levels of mining investment. The unemployment rate has edged higher. There has been an improvement in indicators of household and business sentiment recently, though it is too soon to judge how persistent this will be. Inflation has been consistent with the medium-term target. With growth in labour costs moderating, this is expected to remain the case over the next one to two years, even with the effects of the lower exchange rate.
The easing in monetary policy since late 2011 has supported interest-sensitive spending and asset values. The full effects of these decisions are still coming through, and will be for a while yet. The pace of borrowing has remained relatively subdued to date, though recently there have been signs of increased demand for finance by households. There is also continuing evidence of a shift in savers' behaviour in response to declining returns on low-risk assets.
The RBA's full media release can be found here.
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