Reserve Bank of Australia
Australia’s 50-Basis Point Rate Cut
May 1, 2012
The RBA Board cut the official cash rate to 3.75%, lowest in 26 months, beating expectations of a 25-bp reduction. Policymakers in a statement of explanation said this larger-sized move would “be necessary in order to deliver the appropriate level of borrowing rates” and was “appropriate” in light of moderating inflation and somewhat weaker-than-expected economic [...] More
Australian Monetary Policy Unchanged but with a Possibility of Ease in May
April 3, 2012
The Reserve Bank of Australia’s 4.25% Official Cash Rate (OCR) was not cut at the April Board meeting, nor had such been expected. After cuts of 25 basis points each last November and December and no scheduled meeting in January, officials have considered the 4.25% OCR “appropriate” and did not reduce it any further as [...] More
No Change in Australian Official Cash Rate
March 5, 2012
The Monetary Policy Board retained a 4.25% Official Cash Rate (OCR) and released a statement that 1) expresses less concern about the world economy but 2) maintains an option to cut the rate in the future "should demand conditions weaken materially." It can do this because of a benign inflation outlook, projecting in target CPI [...] More
Greek Austerity Proposals Not Enough
February 10, 2012
A new shock wave of risk aversion hit markets as EU finance ministers rejected the Greek proposed reforms for being insufficient. German Finance Minister Schaeuble projected that Greek debt to GDP would still reach 136% in 2020, 16 percentage points higher than target. Other market depressants overnight stem from disappointing Chinese data and the Reserve [...] More
Reserve Bank of Australia Didn’t Sanction a Third Interest Rate Cut
February 7, 2012
Most analysts had assumed a third Officials Cash Rate cut this month, and they were instead faked out. In a statement from Governor Glenn Stevens, the present 4.25% official cash rate level (OCR) after back-to-back reductions in November and December was called "appropriate," but the door was left open to further easing down the road [...] More
Australian Official Cash Rate Sliced to 4.25%
December 6, 2011
The OCR was cut by 25 basis points for the second consecutive month. Fifty of a total 175 bps of tightening between October 2009 and November 2010 have now been reversed. A statement from Governor Glenn Stevens asserts that the “inflation outlook afforded scope for a modest reduction in the cash rate. The Board will [...] More
Reserve Bank of Australia Cuts Official Cash Rate (OCR) to 4.5%
November 1, 2011
The RBA eased monetary policy for the first time since a 25-basis point OCR cut in April 2009 culminated a six-step 425 basis point easing from September 2008. Today’s reduction was also by 25 basis points. Aggressive monetary and fiscal stimulus as the world economy sank into the Great Recession enabled Australia to be among [...] More
Reserve Bank of Australia Flags New Risk of a Rate Reduction
October 4, 2011
The Reserve Bank of Australia’s Policy Board meets monthly except in January. Policy had a tightening bias since the autumn of 2009. After the September 6th meeting this year, officials had reaffirmed that “growth is still likely to be at trend or higher” and reminded investors that “the Board remains concerned about the medium-term outlook [...] More
Italian Sovereign Debt Rating Downgraded by S&P
September 20, 2011
European equities rebounded after Monday’s drop despite more unsettling news from the region. S&P downgraded Italian long-term sovereign debt to a rating of A from A+. A reassessment by Moody’s is thought also to be likely. Press reports surfaced that the German industrial company Siemens withdrew half a trillion euros recently from one of the [...] More
No Change Made This Month in Australian Official Cash Rate
September 5, 2011
Australian monetary policy was left unchanged as expected, and a more dovish statement was released than after the August Policy Board meeting. The statement leads off with a discussion of “very unsettled” global financial conditions and reduced growth expectations in the advanced economies. For Australia, too, “the near-term growth outlook continues to look somewhat weaker [...] More
