In a widely anticipated move, the Reserve Bank of Australia determined that it was appropriate to leave the benchmark interest rate on hold at a record low 1.50%. According to RBA Governor Philip Lowe, inflations remains low, and is likely to stay at depressed levels for an extended period of time despite headline inflation projected to rise back above 2.00% during the 2017 calendar year.
A significant portion of the drag on the economy is the lingering overhang of the mining boom, however, the weaker Australian dollar is helping to buoy the economy and keep it competitive. Furthermore, investment in other areas of the economy is projected to spur 3.00% growth over the next few years as commodity exports rebound and banks are able to maintain the current pace of lending. In the aftermath of the decision, the Australian dollar fell versus the New Zealand dollar, extending a recent rout.