Aus­tralia keeps in­ter­est rates steady

The Myanmar Times - - International Business -

AUS­TRALIA’S cen­tral bank held in­ter­est rates at a record low of 1.5 per­cent yes­ter­day and in­di­cated what an­a­lysts called a “wait and see” ap­proach to fu­ture mon­e­tary pol­icy eas­ing de­spite a run of soft in­fla­tion fig­ures.

The coun­try is tran­si­tion­ing away from a re­sources in­vest­ment boom that has helped the econ­omy mark a quar­ter of a cen­tury of un­bro­ken growth in the sec­ond quar­ter of this year.

But with un­even growth in the labour mar­ket and non-min­ing sec­tors – and a re­cent spate of weak in­fla­tion data – the Re­serve Bank of Aus­tralia has slashed in­ter­est rates twice since May.

“The board judged that hold­ing the stance of pol­icy un­changed at this meet­ing would be con­sis­tent with sus­tain­able growth in the econ­omy and achiev­ing the in­fla­tion tar­get over time,” RBA gov­er­nor Philip Lowe said in a state­ment af­ter the monthly board meet­ing.

The de­ci­sion to re­main on the side­lines was mostly tipped by an­a­lysts. The Aus­tralian dol­lar edged higher up to 76.5 US cents from 76.2 cents af­ter the state­ment was re­leased.

Aus­tralia like other global economies is fac­ing sub­dued con­sumer price rises ow­ing to tepid global trade and weak wage growth. Core in­fla­tion came in at 1.3pc in the Septem­ber quar­ter, well off the RBA’s tar­get range of 2-3pc.

Mr Lowe em­pha­sised pre­vi­ously that he was flex­i­ble about the pol­icy to­ward in­fla­tion and in the state­ment he noted that the con­sumer price in­dex was track­ing broadly in line with the RBA’s pro­jec­tions.

A down­side sur­prise could there­fore trig­ger an­other rate cut, JP Mor­gan econ­o­mist Tom Kennedy cau­tioned. –

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