Reserve Bank of Australia: Outlook is for a Steady Interest Rate

June 3, 2014

The RBA Board previously cut its Official Cash Rate eight times between November 2011 and August 2013, lowering such by 225 basis points to just 2.5%.  The OCR will continue at that record low level following this month’s policy meeting.  A released statement call the policy stance “accommodative” but “appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the 2-3% target over the next two years.”  Officials observe “somewhat firmer” growth but expects “some time yet before unemployment declines consistently.”  Wage inflation has slowed.  Yet again, officials press for a weaker currency:

The earlier decline in the exchange rate is assisting in achieving balanced growth in the economy, but less so than previously as a result of the higher levels over the past few months. The exchange rate remains high by historical standards, particularly given the further decline in commodity prices.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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