Reserve Bank Lowers Rates To 2.75%

May 07, 2013 Leave a Comment

The Reserve Bank of Australia has cut its cash rate 0.25% to 2.75%, the lowest rate since the 1950s.

In a statement, Governor Glenn Stevens said the RBA’s board “judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target.”

Swan

The Treasurer, Wayne Swan, said the economy had strong growth, low unemployment and contained inflation. He said there was no comparison between today’s low interest rates and the emergency rates that prevailed during the global financial crisis.

Hockey

The Shadow Treasurer, Joe Hockey, said the Reserve Bank was showing leadership and doing the “heavy lifting” for the government by responding to a deteriorating economy. He said rates were now beyond emergency levels.

  • Listen to Wayne Swan’s remarks (11m) – transcript below

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  • Listen to Joe Hockey’s remarks (6m)

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  • Listen to remarks by Peter Anderson, Australian Chamber of Commerce and Industry (4m)

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  • Interest Rates Since 1990

Text of statement from Reserve Bank Governor Glenn Stevens.

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 2.75 per cent, effective 8 May 2013.

The global economy is likely to record growth a little below trend this year, before picking up next year. Among the major regions, the United States continues on a path of moderate expansion and China’s growth is running at a more sustainable, but still robust, pace. Japan has announced significant new policy initiatives aimed at strengthening demand and ending deflation. The euro area remains in recession. Commodity prices have moderated a little in recent months though they remain high by historical standards.

Financial conditions internationally continue to be very accommodative, with risk spreads reduced, funding conditions for most financial institutions improved and borrowing costs for well-rated corporates and sovereigns exceptionally low. [Read more...]

Filed Under: Audio2013, Economy, Gillard, Reserve Bank Tagged With: , , , , ,

Reserve Bank Leaves Interest Rate Unchanged At 3%

Apr 02, 2013 Leave a Comment

The Reserve Bank has left the official cash rate unchanged at 3.0%.

The decision was taken at the bank’s Board meeting today. Rates were last reduced in December 2012. During 2012, rates fell by 1.25%. This followed a reduction of 0.5% in 2011.

In a statement, the Reserve Bank Governor, Glenn Stevens, said: “There are a number of indications that the substantial easing of monetary policy during late 2011 and 2012 is having an expansionary effect on the economy. Further such effects can be expected to emerge over time.”

Stevens said economic growth was “close to trend over 2012, led by very large increases in capital spending in the resources sector”. The peak in resource investment is “drawing close”, he said.

Inflation is consistent with the medium-term target of 2%.

The ALP was quick to release this graphic:

ALP

Statement from Glenn Stevens, Governor of the Reserve Bank of Australia.

At its meeting today, the Board decided to leave the cash rate unchanged at 3.0 per cent.

Global growth is forecast to be a little below average for a time, but the downside risks appear to be reduced. While Europe remains in recession, the United States is experiencing a moderate expansion and growth in China has stabilised at a fairly robust pace. Around Asia generally, growth was dampened by the earlier slowing in China and the weakness in Europe, but again there are signs of stabilisation. Commodity prices have declined somewhat recently, but are still at historically high levels.

Internationally, financial conditions are very accommodative. Risk spreads are narrow and funding conditions for financial institutions have improved. Long-term interest rates faced by highly rated sovereigns, including Australia, remain at exceptionally low levels. Borrowing conditions for large corporations are similarly very attractive. Share prices are substantially above their low points. However, the task of putting private and public finances on sustainable paths in several major countries is far from complete. Accordingly, financial markets remain vulnerable to setbacks. [Read more...]

Filed Under: Economy, Reserve Bank Tagged With: , ,

Reserve Bank Leaves Interest Rates Unchanged

Mar 05, 2013

At its monthly meeting today, the Reserve Bank of Australia has left the cash rate unaltered.

The cash rate has been 3.0 per cent since the Reserve’s December board meeting.

Statement from Glenn Stevens, Governor of the Reserve Bank of Australia.

At its meeting today, the Board decided to leave the cash rate unchanged at 3.0 per cent.

Global growth is forecast to be a little below average for a time, but the downside risks appear to have lessened over recent months. The United States is experiencing a moderate expansion and financial strains in Europe are considerably reduced compared with the situation through much of last year. Growth in China has stabilised at a fairly robust pace. Around Asia generally, growth was dampened by the earlier slowing in China and the weakness in Europe, but again there are signs of stabilisation. Commodity prices are little changed recently, at reasonably high levels.

Sentiment in financial markets is much improved compared with the middle of last year. Risk spreads have narrowed and funding conditions for financial institutions are more favourable. Long-term interest rates faced by highly rated sovereigns, including Australia, remain at exceptionally low levels. Borrowing conditions for large corporations are very attractive. Share prices have risen substantially from their low points. However, the task of putting private and public finances on sustainable paths in several major countries is far from complete. Accordingly, as seen most recently in Europe, financial markets remain vulnerable to occasional setbacks. [Read more...]

Filed Under: Economy, Reserve Bank Tagged With: , ,

Anthony Albanese: Driving Productivity Through Infrastructure

Mar 04, 2013

The Minister for Infrastructure and Transport, Anthony Albanese, has outlined the federal government’s approach to infrastructure and productivity in an address to The Sydney Institute.

Albanese

  • Listen to Albanese’s speech (27m)

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  • Listen to the Question & Answer session (35m)

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Transcript of Infrastructure and Transport Minister Anthony Albanese’s speech to The Sydney Institute.

Infrastructure: Driving Productivity

INTRODUCTION

“Productivity isn’t everything, but in the long run it is almost everything.”

So said Paul Krugman in his “The Age of Diminished Expectations”.

It’s no secret that Australia’s overall productivity rate has fallen over the past decade.

There are some who argue that the solution lies totally in industrial relations.

This is ideologically driven.

The fact is that Australia’s labour productivity is in the top dozen of international performers.

As the Australian National University’s Dean Parham pointed out recently, in recent years labour productivity has increased by 3.3 per cent per year.

Whilst this has occurred, capital productivity has actually declined by 4.3 per cent.

So the truth is that addressing productivity requires more than the simplistic slogans of those who would seek to return to WorkChoices under another name. [Read more...]

Filed Under: A.L.P., Audio2013, Economy, Gillard, Infrastructure Tagged With: , , , , , , ,

Reserve Bank Governor Glenn Stevens Appears Before House Economics Committee

Feb 22, 2013

Glenn Stevens, the Governor of the Reserve Bank of Australia, has appeared before the House of Representatives Standing Committee on Economics.

Stevens told the committee that economic growth “was probably about trend in 2012 as a whole” but “our sense is that the economy has entered 2013 at a pace a little below that”.

Stevens said that “the economy will be adjusting to the peak if the mining boom and some other areas of demand will have room to grow more quicly than they have in recent years”. He said the threat of extreme financial instability in the euro area “has abated” and the United States has avoided the worse of the “fiscal cliff”. He said the slowdown in China has come to an end.

Text of opening statement by Reserve Bank Governor Glenn Steven to the House of Representatives Standing Committee on Economics.

In the six months since the August hearing, economic and financial conditions abroad have generally improved. We can see three key sets of developments.

First, the threat perceived in the middle of last year of extreme financial instability arising in the euro area – and, in the eyes of some, possible disintegration of the euro – has abated. This followed various important steps taken by European policymakers. Interest rates faced by some of the key sovereigns which were under acute pressure have declined markedly, and funding conditions for many European banks have improved to the point where some of the central bank funding that had been supplied has been repaid. These countries, and Europe generally, still face immense challenges and it is, as usual, important to stress that sentiment remains vulnerable to setbacks. But a truly disastrous outcome was, once again, avoided. [Read more...]

Filed Under: Economy, Parliamentary Committees, Reserve Bank Tagged With: ,
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