RBA Leaves Cash Rate Unchanged

RBA Leaves Cash Rate Unchanged

The Reserve Bank of Australia at it’s meeting today, Tuesday 3 December 2013 has decided to leave the cash rate unchanged at 2.50% p.a.

The following is an excerpt from today’s RBA Media Release.

“Recent information is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next year. Commodity prices have declined from their peaks, but generally remain at high levels by historical standards. Inflation in most countries is well contained.

….

In Australia, the economy has been growing a bit below trend over the past year and the unemployment rate has edged higher. This is likely to persist in the near term, as the economy adjusts to lower levels of mining investment. Further ahead, private demand outside the mining sector is expected to increase at a faster pace, though considerable uncertainty surrounds this outlook. There has been an improvement in indicators of household and business sentiment recently, but it is still unclear how persistent this will be. Public spending is forecast to be quite weak.

Recent data on prices and wages show inflation consistent with the medium-term target. The Bank’s assessment is that this is likely to remain the case over the next one to two years.

….

The Australian dollar, while below its level earlier in the year, is still uncomfortably high. A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy.

At today’s meeting, the Board judged that the setting of monetary policy remained appropriate. The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target.”

Read the full media release on the RBA website