RBA Kept the Cash Rate At 2.5% Unchanged

The RBA decided to leave the cash rate unchanged at 2.5 per cent.

 

Growth in the global economy is continuing at a moderate pace. China’s growth has generally been in line with policymakers’ objectives, though weakening property markets present a challenge in the near term. Commodity prices in historical terms remain high, but some of those important to Australia have declined further in recent months.

 

Volatility in some financial markets has picked up over the past couple of months. Overall, however, financial conditions remain very accommodative. Long-term interest rates and risk spreads remain very low. Markets still appear to be attaching a low probability to any rise in global interest rates or other adverse event over the period ahead.

 

In Australia, most data are consistent with moderate growth in the economy. Resources sector investment spending is starting to decline significantly, while some other areas of private demand are seeing expansion, at varying rates. Public spending is scheduled to be subdued. Overall, the Bank still expects growth to be a little below trend for the next several quarters.