Reserve Bank Leaves Interest Rates On Hold

Four days out from the federal election, the Reserve Bank of Australia has left the cash rate unchanged at 2.5% at its monthly meeting.

The bank lowered the cash rate at its last meeting in August, two days after Prime Minister Kevin Rudd called the election.

The bank increased the rate in November 2007, during the election campaign which led to the defeat of the Howard government.

Text of statement by Glenn Stevens, Governor, Reserve Bank of Australia.

At its meeting today, the Board decided to leave the cash rate unchanged at 2.5 per cent.

Recent information is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next year. Commodity prices have declined from their peaks, but generally remain at high levels by historical standards. Inflation in most countries remains well contained. [Read more...]


Bowen And Hockey Spar Over Interest Rate Decision

The Treasurer, Chris Bowen, has defended today’s interest rate decision by the Reserve Bank, whilst the shadow Treasurer, Joe Hockey, says the economy is weakening.

At a press conference following the Bank’s decision to cut the cash rate by 25 basis points to 2.5%, Bowen said lower interest rates contributed to lower living costs for Australians, particularly in housing. [Read more...]


Reserve Bank Cuts Interests Rates By 0.25% To 2.5%; Lowest In Half A Century

The Reserve Bank of Australia has cut the cash rate by 25 basis points.

The cash rate is now 2.5%, the lowest since the 1950s.

Statement released by 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 2.5 per cent, effective 7 August 2013.

Recent information is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next year. Commodity prices have declined but, overall, remain at high levels by historical standards. Inflation has moderated over recent months in a number of countries. [Read more...]


Reserve Bank Leaves Cash Rate Steady At 2.75%

The Reserve Bank of Australia has left interest rates unchanged in its monthly decision announced today.

The cash rate remains at 2.75%. The bank last changed the rate in May.

In a statement, the Governor of the bank, Glenn Stevens, said: “The Board judged that the easier financial conditions now in place will contribute to a strengthening of growth over time, consistent with achieving the inflation target. It decided that the stance of monetary policy remained appropriate for the time being. The Board also judged that the inflation outlook, as currently assessed, may provide some scope for further easing, should that be required to support demand.”

Bowen

The new Treasurer, Chris Bowen, has held a press conference to comment on the Reserve Bank’s decision.

  • Listen to Bowen – transcript below (17m)

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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 2.75 per cent.

Recent information is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next year. Commodity prices have declined further but, overall, remain at high levels by historical standards. Inflation has moderated over recent months in a number of countries. [Read more...]


Reserve Bank Leaves Cash Rate Unchanged

The Reserve Bank of Australia has left the cash rate unchanged at 2.75%.

The decision was made at the bank’s monthly board meeting today.

The bank says that “the easier financial conditions now in place will contribute to a strengthening of growth over time, consistent with achieving the inflation target”.

Text of statement from Glenn Stevens, Governor of the Reserve Bank.

At its meeting today, the Board decided to leave the cash rate unchanged at 2.75 per cent.

Information becoming available since the previous meeting is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next year. Commodity prices have declined from their peaks but, overall, remain at high levels by historical standards. Inflation has generally moderated over recent months and monetary policy has been eased further in a number of countries.

Financial conditions internationally are very accommodative. Despite the recent rise in sovereign bond yields, funding conditions for sovereigns, well-rated corporates and most financial institutions remain very favourable. [Read more...]


Reserve Bank Lowers Rates To 2.75%

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...]


Reserve Bank Leaves Interest Rate Unchanged At 3%

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...]