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PPG_Blog_Feb_image 1_interest rate update

After its board held the first monetary policy meeting of 2013 last Tuesday, the Reserve Bank of Australia (RBA) announced it would keep the current cash rate at 3%. It’s expected, however, that the RBA will deliver another cut soon if needed, taking the rate to its lowest level in more than 50 years.

Governor Glenn Stevens said in his statement after the meeting that the Board’s view is that with inflation likely to be consistent with the target, and growth expected to be a little below trend over the coming year, an accommodative stance of monetary policy is fitting.

Mr Stevens also said that, “The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand. At today’s meeting, taking into account the flow of recent information and noting that there had been a substantial easing of policy as a result of previous decisions, the Board judged that it was prudent to leave the cash rate unchanged. 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 over time.”

The next meeting of the Reserve Bank Board will be on the 5th March.

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