RBA announce cash rate target to remain steady

. 2 min read

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:

https://rba.gov.au/media-releases/2019/mr-19-07.html

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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