Reserve Bank of Australia Governor Glenn Stevens concurs with experts that the RBA faces a ‘difficult job’ to balance its economy to make sure it doesn’t undershoot its inflation target. Stevens, who is in the lame duck period of his tenure and set to retire in September, stated that the benchmark range for Australian inflation for the last decade is now outdated. For about the last ten years, the inflation target was at 2.00-3.00% while maintaining an unemployment range between 5.00-6.00%. As deflation looms over the Australian economy, the RBA forecasted inflation will remain below its target until the end of 2018. Stevens stated right after the interest rate decision that ‘inflation returning to target over time, would be improved by easing monetary policy’ meaning that another rate cut in the future is not out of the realm of possibility.
New Zealand Expects to Follow Australia and Cut Interest Rates
Daily Analysis - 10/08/2016