The Reserve Bank of Australia today left the country’s official cash rate at 3%, as expected. Here’s a summary of the board’s rationale from RBA governor Glenn Stevens:
- While global economic growth is going to be a little below average for a while, the downside risk appears to be reduced as well. Things aren’t great in Europe, but the US is growing and China has stabilised at a fairly robust pace. And while commodity prices are down, they’re still relatively strong.
- Interest rates for highly-rated countries like Australia are very low. Borrowing conditions for big companies are also good.
- The peak in resources investment, otherwise known as the “mining boom”, is getting closer. But there is scope for other sectors to pick up the slack.
- Recent information suggests moderate growth in private consumption spending, though a return to the very strong growth of some years ago is unlikely.
- Businesses are still trying to lift their efficiency levels, as labor costs are constrained. This should keep inflation down.
- Monetary policy during late 2011 and early 2012 looks like it has helped to expand the economy and it will probably could keep getting better.
- The exchange rate, which has risen recently, remains higher than might have been expected, considering export prices have gone down.
Read the full statement here.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.