Reserve Bank of Australia Cuts Interest Rate as Expected to New Record Low of 1.0%
July 2, 2019
The Board of the Reserve Bank of Australia engineered a second consecutive 25-basis point reduction of its Official Cash Rate, which now drops to a record low 1.0%. A released statement asserts a readiness to act further if deemed necessary: “The Board will continue to monitor developments in the labor market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time.” Australia has not been immune from the global slowdown and continues to face external risks in spite of the temporary Chinese-U.S. trade war truce. Inflation has hovered below target for some time, and officials are concerned that a prolonged undershoot could jeopardize the credibility of its price target, especially since unemployment has moved further above their desired level. Today’s rate cut was the twelfth of the present easing cycle and the first reduction at consecutive policy meetings since 2012. Prior to last month, the OCR had been at 1.5% since a 25-basis point cut in August 2016.
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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