Australian Official Cash Rate Kept at Record Low of 1.5% as Expected
December 5, 2017
The OCR of the Reserve Bank of Australia has been 1.5% since a pailr of 25-basis point reductions in May and August of last year. Governor Lowe’s statement after this month’s Board meeting reiterates that wage and core price inflation, as well as long-term interest rates, continue to be low. It does not assert that the Aussie dollar is overvalued or protest recent movement in the currency but includes a reminder that if the Aussie dollar were to rise, such “would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.” The pick-up of inflation is projected to be gradual, and the current accommodate policy stance is considered appropriate to meet the twin goals of sustaining growth and “achieving the inflation target over time.”
Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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