The Reserve Bank of Australia (RBA) has left the country’s official cash rate unchanged at 3.50 per cent, citing an unchanged outlook on inflation coupled with a stronger than expected economic performance in the first half the year.

 

In his statement, RBA Governor Glenn Stevens said that while financial markets remain volatile and regional growth continues to be somewhat subdued, he said that a strong business credit result had bolstered overall credit growth.

 

Mr Stevens also sited historically strong terms of trade as an ongoing buoy for the Australian economy and will assist in keeping inflation within the 2-3 per cent target band.

 

The Governor also cited a fall in commodity prices as a means to relieve pressure on inflation, providing some countries the ability to ease macroeconomic policies, resulting in a stronger control over inflation.

 

“As a result of the sequence of earlier decisions, there has been a material easing in monetary policy over the past six months. At today's meeting, the Board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate,” Mr Stevens concluded.