As 2016 ends, the Reserve Bank of Australia has left the cash rate at 1.5%.
At its monthly board meeting, the bank made no change to the rate that has been in place since August. Movements in the cash rate are generally reflected in movements in commercial interest rates.
In a statement, the bank’s Governor, Philip Lowe, repeated points made in previous months about rising commodity prices, the effective functioning of financial markets and Australia’s transition from the mining investment boom. It says unemployment has decreased, inflation is low and the housing market has strengthened.
At the beginning of the year, the cash rate was 2.0%. The bank reduced the rate by 0.25% in May and by 0.25% in August. The rate is at an historic low point.
Statement by Philip Lowe, Governor of the Reserve Bank of Australia.
Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
The global economy is continuing to grow, at a lower than average pace. Labour market conditions in the advanced economies have improved over the past year. Economic conditions in China have steadied, supported by growth in infrastructure and property construction, although medium-term risks to growth remain. Inflation remains below most central banks’ targets, although headline inflation rates have increased recently. Globally, the outlook for inflation is more balanced than it has been for some time. [Read more…]