Cen­tral bank holds rates at 1.5pc for 8th straight month

New Straits Times - - Business World -

Aus­tralia’s cen­tral bank held rates steady yes­ter­day, a widely ex­pected de­ci­sion given pol­i­cy­mak­ers recently sig­nalled a steady outlook for much of the year ahead.

The cen­tral bank kept rates at a record low of 1.5 per cent for an eighth straight month, fol­low­ing eas­ings in Au­gust and May last year.

The Aus­tralian dol­lar inched higher af­ter the rate de­ci­sion, sup­ported by the outlook for steady pol­icy. It was last up 0.5 per cent at A$0.7619 (RM2.58) af­ter drop­ping to a more than onemonth low of A$0.7598 this week.

Gov­er­nor Philip Lowe has re­peat­edly em­pha­sised lim­its to mon­e­tary pol­icy and last month said fur­ther cuts in in­ter­est rates would not be in the na­tional in­ter­est as the dan­ger of a debt-fu­elled boom and bust was too se­vere.

With the gov­er­nor sig­nalling a high bar for a move lower, in­ter­bank fu­tures im­ply a mere six per cent chance of an­other cut by Au­gust.

Yes­ter­day, Lowe main­tained his up­beat tone as Aus­tralia’s A$1.7 tril­lion econ­omy ex­panded 2.4 per cent last year, helped by a jump in com­mod­ity prices and strong con­sumer spend­ing.

In Manila, the Philip­pine cen­tral bank gov­er­nor yes­ter­day said it saw no rea­son to change mon­e­tary pol­icy even af­ter in­fla­tion picked up to its fastest pace in 27 months last month due to higher food costs.

“As the uptick is in line with fore­casts, there ap­pears to be no im­me­di­ate im­pe­tus to ad­just the stance of mon­e­tary pol­icy, but we will re­main data de­pen­dent in our as­sess­ment and forth­com­ing de­ci­sions,” said Bangko Sen­tral ng Pilip­inas gov­er­nor Amando Te­tangco.

Con­sumer prices in the Philip­pines last month rose 3.3 per cent from a year ear­lier, but was within the range the cen­tral bank had ex­pected.

Philip Lowe

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