Reserve Bank of Australia
July 7, 2015
For a second straight monthly meeting, the RBA Board has left the official cash rate at a record low of 2.0%. Earlier, cuts of 25 basis points were made in February and May of this year, August and May of 2013, and December, October and June of 2012. In May 2012, the OCR was reduced by 50 bps to start this down-cycle. A statement released by the Board today reads extremely similarly to the one in June. The statements observe moderately paced global economic expansion, sub-trend growth in Australia with spare capacity likely to persist for “some time yet.” Officials predict in-target inflation “over the next one to two years even with a lower exchange rate.” Accommodative monetary policy is needed to “support borrowing and spending,” and further Aussie dollar depreciation “seems both likely and necessary, particularly given the significant declines in key commodity prices.” A clause in the May statement that read, “despite some increases in bond yields recently” was replaced by language saying, “despite fluctuations in markets associated with the respective developments in China and Greece.”
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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