Cash rate left unchanged
The Reserve Bank of Australia (RBA) has announced it has left the country’s official cash rate at 3.0 per cent, following the Board’s meeting earlier this week.
A below global growth trend, a recession bound Europe and moderate growth data coming out of China were all cited as major influences in the decision.
RBA Governor, Glenn Stevens, said that global financial conditions have appeared to become less risky, while funding conditions for financial institutions have generally improved.
“Borrowing conditions for large corporations are similarly very attractive. Share prices are substantially above their low points,” Mr Stevens said.
Australia’s growth rate has remained close to trend over the 2012, driven by large capital expenditure in the resources sector, which Mr Stevens said is close to hitting peak investment.
“Recent information suggests that moderate growth in private consumption spending is occurring, though a return to the very strong growth of some years ago is unlikely,” Mr Stevens said.
“Inflation is consistent with the medium-term target, with both headline CPI and underlying measures at around 2¼ per cent on the latest reading. Labour costs remain contained and businesses are focusing on lifting efficiency.”