Reserve Bank of Australia
March 1, 2016
The RBA Board decided to keep its official cash rate at 2.0%, the level since a 25-basis point cut last May. Between November 2011 and then, there were ten rate reductions totaling 275 basis points, including two 25-basis point moves in the first half of 2015. A statement released after the March policy meeting observes positive continuing economic growth led by non-mining activities, as well as improving labor market conditions, quite low inflation and a pick-up in corporate borrowing. Similar language was used regarding the exchange rate “adjusting to the evolving economic outlook,” and the current policy stance was deemed appropriate. But officials aren’t precluding a future possible rate cut: “new information should allow the Board to judge whether the improvement in labor market conditions is continuing and whether the recent financial turbulence portends weaker global and domestic demand. Continued low inflation would provide scope for easier policy, should that be appropriate to lend support to demand.”
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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