The Reserve Bank of Australia kept its interest rates untouched during its September meeting, with Governor Glenn Stevens releasing his final statement before stepping down on the 18th of September, to be replaced by his Deputy Governor Philip Lowe. The central bank kept rates at a record low of 1.50% after having slashed 50 basis points in 2 installments at the start of the year, occurring in May and in August. The Governor’s statement reflected the current low rates that are supporting domestic demand and in turn will continue to maintain Australia’s growth rate target of 3.10% - if not surpass it.
Before making a move the central bank will closely monitor upcoming third quarter inflation data as well as the country’s unemployment rate before policymakers convene for a decision on the 1st of November. The local currency needs to be controlled but external factors, mostly arising from the US, are just adding to further strength. On the other hand the current low rates are a good motive for the government to add more fiscal policy but Treasurer Scott Morrison wants to focus on paying the country’s debt so as to maintain Australia’s AAA rating.
In Consideration of Rate Changes, Australia
Market Trends - 06/09/2016