Reserve Bank Cuts Interest Rates Another 0.25% To 4.25%

Dec 06, 2011

The Reserve Bank of Australia has cut interest rates for the second month in a row.

The reduction of 25 basis points – 0.25% – takes the cash rate to 4.25%.

The Treasurer, Wayne Swan, welcomed the cut, describing it as “welcome Christmas cheer”. He called on the banks to pass on the reduction in full.

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

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 4.25 per cent, effective 7 December 2011.

Growth in the global economy has moderated this year after a strong performance in 2010. Some of the slowing reflected temporary factors, and as these passed, the pace of expansion in the United States and much of Asia began to pick up around mid year. China’s growth has been slowing, as policymakers there had intended. Trade in Asia is now, however, seeing some effects of a significant slowing in economic activity in Europe. [Read more...]

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Reserve Bank Lowers Interest Rates 0.25%

Nov 01, 2011

The Reserve Bank of Australia has lowered the cash rate 0.25% to 4.5%.

This is the first movement in interest rates since November last year.

Reserve Bank Governor Glenn Stevens said there had been a “moderation in the pace of global growth, though fears of a major downturn have not been borne out so far”. He said trade performance “is starting to see some effects of a significant slowing in economic activity in Europe” and noted that commodity prices “have generally declined over recent months”.

Statement from Glenn Stevens, Governor of the Reserve Bank.

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 4.5 per cent, effective 2 November 2011.

Recent information is consistent with a moderation in the pace of global growth, though fears of a major downturn have not been borne out so far. The pace of US economic expansion picked up in the September quarter, but is still only moderate and leaves considerable spare capacity. China’s growth has slowed, as policymakers there had intended. Output in Asia has now recovered from the effects of the Japanese earthquake, and domestic demand in the region is generally expanding. Trade performance, however, is starting to see some effects of a significant slowing in economic activity in Europe, where the prospects are for economic weakness to continue. Commodity prices, while still at high levels, have generally declined over recent months. [Read more...]

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Reserve Bank Leaves Interest Rates On Hold

Feb 01, 2011

The Reserve Bank of Australia has left the cash rate unchanged at 4.75%.

The bank’s February decision was announced at 2.30pm today.

Text of statement from Reserve Bank Governor Glenn Stevens.

At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent.

Global output grew strongly in 2010, notwithstanding the relatively subdued performance of several of the major economies. The Chinese and Indian economies in particular have recorded very strong expansions, and price pressures, particularly for food and raw materials, have picked up. Concerns about sovereign creditworthiness in Europe have remained prominent and uncertainty from this source seems likely to persist for some time. Overall, however, the global economy continues to look strong going into 2011. Commodity prices have remained high and in many instances have risen further over recent months.

Australia’s terms of trade are at their highest level since the early 1950s and national income is growing strongly. There have been further indications that private investment is beginning to pick up in response to high levels of commodity prices. In the household sector thus far, in contrast, there continues to be caution in spending and borrowing, and an increase in the saving rate. Asset values have generally been little changed over recent months and overall credit growth remains quite subdued, notwithstanding evidence of some greater willingness to lend. [Read more...]

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Reserve Bank Governor’s Statement to House of Reps Economics Committee

Nov 26, 2010

This is the text of the opening statement to the House of Representatives Standing Committee on Economics by Glenn Stevens, Governor of the Reserve Bank.

When we last met with the Committee in February this year, it was becoming clear that the recovery in the global economy was proceeding faster than many had expected. It was also clear that the strongest performance was in the emerging world, while recoveries in countries that had been at the centre of the financial events of 2007 and 2008 were relatively subdued. Global financial markets had continued to improve, but were paying close attention to the rise in sovereign debt in a number of countries.

At that time, people were talking about an expansion in global GDP of something like 4 per cent in 2010. As it turns out, it looks like the outcome will be stronger than that: current estimates for the year are about 4¾ per cent, which is above trend. The pattern of growth is still rather uneven. The additional strength has been concentrated in the emerging countries, with growth in China and India running at a pace of around 10 per cent in 2010. In contrast, growth of about 2½ per cent for the G7 group, after a contraction of around 3½ per cent in 2009, will leave a considerable margin of spare capacity and particularly of unemployed labour. [Read more...]

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Reserve Bank Cuts Interest Rates Another 0.75%

Nov 04, 2008

The Reserve Bank of Australia has cut the cash rate a further 0.75% to 5.25%.

The 0.75% cut follows reductions of 1.0% in October and 0.25% in September.

Listen to Treasurer Wayne Swan comment on the interest rate decision:

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Rudd And Swan Comment On Interest Rate Cut

Oct 07, 2008

As borrowers wait on the Australian banks to announce the extent of their “pass through” of today’s 1% interest rate cut, the Prime Minister and Treasurer have commented on the Reserve Bank’s decision.

Click the Play button to listen to Kevin Rudd and Wayne Swan:

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Reserve Bank Cuts Interest Rates By One Percent

Oct 07, 2008

The Reserve Bank of Australia has confounded economic pundits by announcing a cut of one full percentage point in interest rates.

The cash rate has been cut from 7% to 6%. The common prediction in recent days had been for a 0.5% cut.

[Read more...]

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Interest Rates Up Again

Mar 04, 2008

The Reserve Bank of Australia today increased interest rates by a further 0.25%.

The increase takes the cash rate to 7.25%.

It is the second consecutive increase this year. Interest rates are now at a 12-year high.

Listen to Kevin Rudd and Wayne Swan discuss the increase at a press conference this afternoon:

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Reserve Bank Increases Interest Rates

Feb 05, 2008

The Reserve Bank of Australia has increased the cash rate by 0.25% to 7.00%.

In a statement accompanying the decision, the Governor of the Reserve Bank, Glenn Stevens, said the Board had “concluded that a tighter monetary policy setting was needed now”.

Stevens cited “significant inflation pressures”, a “slowing” world economy and “fragile” sentiment in international capital and equity markets as the main reasons for the increase.

[Read more...]

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Reserve Bank Holds Interest Rates But Still Concerned About Inflation

Dec 05, 2007

The Reserve Bank of Australia has held interest rates at current levels but expressed concern about inflation tendencies in the economy.

Following the Reserve’s board meeting yesterday, the cash rate remains unchanged at 6.75%.

The Governor of the Reserve Bank, Glenn Stevens, said: “The Board remains concerned about the outlook for inflation.”

This is the text of the statement from the Reserve Bank:

STATEMENT BY GLENN STEVENS, GOVERNOR

MONETARY POLICY

At its meeting yesterday, the Board decided to leave the cash rate unchanged at 6.75 per cent. As part of wider changes to communication practices which the Board has adopted (see separate announcement on communication), it was further decided that a statement explaining the decision would be released.

Recent information continues to indicate strength in demand and output in Australia, with the economy having relatively little surplus capacity. Inflation on a year ended basis, as measured by the CPI and underlying measures, is likely to be above 3 per cent in the first half of 2008, and to decline somewhat thereafter.

Sentiment in global credit markets has deteriorated recently after an earlier improvement and prospects for growth in the major economies appear to be weakening. It is unclear to what extent that will affect Asia, where conditions at this point look quite strong. But overall, it now appears likely that global growth will be closer to trend in 2008, after several years of above trend growth. High prices for food, energy and natural resources, however, continue to pose a significant risk to inflation around the world.

In Australia, the pressures arising from the global financial turmoil have been less pronounced than elsewhere, and the flow of credit to sound borrowers does not appear to have been impaired. Nonetheless borrowing costs have risen appreciably since mid year, particularly for business borrowers, as a result both of changes in monetary policy and market-driven increases in funding costs for intermediaries. Depending on conditions in wholesale markets in the near term, some further rise in rates charged to borrowers may yet occur. These developments will help to contain private demand over the period ahead.

The Board remains concerned about the outlook for inflation. But given the heightened uncertainty about the international outlook and the local trends in wholesale borrowing costs, both of which could have a bearing on inflation over the medium term, it judged that the current stance of monetary policy should be maintained for the time being.

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