Australian Official Cash Rate Cut to Record Low 1.50%

August 1, 2016

The Reserve Bank of Australia was reduced 50 basis points in late 2011, 100 basis points in 2012, 50 bps in 2013, 50 bps in 2015 and, with this latest cut of 25 basis points, another 50 basis points in 2016.  The assessment of Australia’s economy in a released statement reads similarly to the wording after the June meeting when the rate was kept steady at 1.75%.  It says,

Recent data suggest that overall growth is continuing at a moderate pace, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend. Labor market indicators continue to be somewhat mixed, but are consistent with a modest pace of expansion in employment in the near term.

A catalyst for this latest policy easing may have been quarterly CPI data in 2Q released July 27.  Total inflation fell to 1.0% from 1.3% in 1Q and 1.7% in 4Q15.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.




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