Aus­tralia holds rates steady at record low

The Myanmar Times - - International Business -

THE Aus­tralian cen­tral bank yes­ter­day held in­ter­est rates steady at a record low of 1.5 per­cent, as it waits for more in­for­ma­tion on in­fla­tion pres­sures be­fore its next move.

Rates have been cut twice in the past four months, in­clud­ing by 25 ba­sis points in Au­gust, in a bid to boost slug­gish in­fla­tion as the econ­omy tran­si­tions to­ward non­re­sources growth.

Fig­ures in July showed in­fla­tion fell to a 17-year low of 1pc in April-June, well off the tar­get of 2-3pc.

Last month’s rate cut is ex­pected to take some time to feed through to pos­si­bly push­ing up con­sumer prices, with the RBA’s own fore­casts in May ex­pect­ing in­fla­tion to only lift in late 2017 or in 2018.

Most econ­o­mists ex­pected the cen­tral bank to hold fire to see what im­pact the ear­lier cuts were hav­ing and out­go­ing RBA gover­nor Glenn Stevens said the cur­rent cash rate was ap­pro­pri­ate.

Mr Stevens, in his last state­ment as gover­nor be­fore hand­ing over to his deputy Philip Lowe, added that “in­fla­tion re­mains quite low”.

Aus­tralia has been grow­ing more strongly than most of the world’s ad­vanced economies but is strug­gling to kick­start in­fla­tion with global trade tepid.

The Aus­tralian dol­lar, which moved slightly higher in the leadup to the an­nounce­ment, was steady im­me­di­ately af­ter the de­ci­sion at 76.22 US cents. –

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