RBA leaves rates unchanged

Aug 30 2019 Published by under 深圳桑拿网

The central bank's board met for the last time this year today to discuss monetary policy.

南宁桑拿

It announced today that the cash rate would remain unchanged at 6.75 per cent.

The decision was widely expected.

Financial market economists predict the bank won't move again until next year, perhaps as early as February following the release of the next set of quarterly inflation figures.

In a statement accompanying the bank's decision today, governor Glenn Stevens said inflation remained a concern.

“The board remains concerned about the outlook for inflation,” he said.

“But given the heightened uncertainty about the international outlook and the local trends in wholesale borrowing costs, both of which could have a bearing on inflation over the medium term, it judged that the current stance of monetary policy should be maintained for the time being.”

This is the first time the central bank has released a statement explaining its reasoning when it has left rates unchanged.

Mr Stevens said the decision to release a statement today was part of a move by the Reserve Bank to be more transparent.

“As part of wider changes to communication practices which the board has adopted, it was further decided that a statement explaining the decision would be released,” he said.

Mr Stevens said also that recent data continued to indicate strength in demand and output in Australia, with the economy having little surplus capacity.

He said the annualised rate of inflation, as measured by the consumer price index and underlying measures, was likely to be above three per cent in the first half of 2008, and to decline somewhat thereafter.

The outlook was in line with the bank's last quarterly statement on monetary policy released in November.

“Sentiment in global credit markets has deteriorated recently after an earlier improvement and prospects for growth in the major economies appear to be weakening. It is unclear to what extent that will affect Asia, where conditions at this point look quite strong,” Mr Stevens said.

“But overall, it now appears likely that global growth will be closer to trend in 2008, after several years of above trend growth.

“High prices for food, energy and natural resources, however, continue to pose a significant risk to inflation around the world.”

He said that in Australia, the pressures arising from the global financial market turmoil have been less pronounced.

The flow of credit to “sound” borrowers did not appear to have been impaired.

“Nonetheless borrowing costs have risen appreciably since mid year, particularly for business borrowers, as a result both of changes in monetary policy and market-driven increases in funding costs for intermediaries,” Mr Stevens added.

“Depending on conditions in wholesale markets in the near term, some further rise in rates charged to borrowers may yet occur.

“These developments will help to contain private demand over the period ahead.”

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