No one really expected the RBA to move rates in either direction from the 2.5% they have been sitting at since August this year.
But that doesn’t mean the market wasn’t interested in the direction of interest rates, or if the governor’s recent aggressive verbal intervention in the Aussie dollar would be repeated in today’s statement.
And his comments look exactly the same as last month, when the RBA reiterated that the easing that has been done since 2011 is supporting spending, and has some room to run noting that “the full effects of these decisions are still coming through”.
This suggests they are becoming more comfortable about the enduring nature of this recovery.
On the Australian dollar front, last month the RBA said that the currency was “uncomfortably high” and this month even with the AUD below 91 cents the RBA repeated its statement that “a lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy”.
In summary, the RBA still wants a lower dollar and rates are on hold for a while, until the full effects of easing filter through the economy.