The Reserve Bank of Australia just announced the cash rate target will be held steady at the record low of 1.50%. This outcome was widely expected.
The pertinent points in the RBA’s accompanying statement, which was very similar to December’s, were:
- Cash Rate unchanged at 1.5%
- Will set monetary policy to support sustainable economic growth
- Labour market remains strong, skills shortages in some areas
- Low rates supporting economy
- Some pickup in wages growth is a welcome development
- Progress on unemployment, inflation expected to be gradual
- Inflation remains low and stable
- Central scenario for underlying inflation 2% in 2019, and 2.25% in 2020
- Housing markets in Sydney, Melbourne are soft
- Credit conditions for some borrowers have tightened
- Expects further lift in wages over time, but at a gradual process
- Downside risks to global economy have increased
- GDP data paints a softer picture of economy than labour data
- Growth in household consumption affected by protracted period of weakness
- Board to monitor developments, set policy to support growth
- Drought in parts of the country has affected farm output
- AUD has remained in a narrow range
- The AUD is a little lower in immediate response.
Below is the link to the RBA statement:
Earlier today, Building Approvals hit the cover off the ball in recording a +19.1% increase for February, compared with -1.8% forecast.
Current indicative levels are:
AUD-USD 0.7090 / 0.7115
AUD-EUR 0.6325 / 0.6350
AUD-GBP 0.5420 / 0.5445
AUD-JPY 79.00 / 79.25
AUD-NZD 1.0465 / 1.0490
The next RBA Cash Rate policy meeting will be held on Tuesday 7th May 2019.
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