The Reserve Bank of Australia left the key rate unchanged at 2.00% during the last meeting of the Monetary Policy Committee on June 2nd. Much of the rationale for leaving policies unchanged was the challenging global dynamic with the meeting minutes discussing in depth the financial conditions in China, Japan, United States, and Euro Area. From a domestic standpoint, business investment continues to decline even on the backdrop of stronger household credit growth which grew at a 10.00% annualized pace according to the latest figures. Investment in mining and commodity sectors continues to contract with most domestic investment funneled to the retail and real estate sectors. Nevertheless, growth remains below trend, heightening the chance that the Central Bank will ease policy further and act to cut rates by another 25 basis points in a subsequent meeting to help stimulate the economy by pressuring the Australian dollar lower.
Australia Releases MPC Minutes
Daily Analysis - 16/06/2015