25 years of economic growth but rates still on hold

In Uncategorized by Jeff OsborneLeave a Comment

The Reserve Bank of Australia announced it will hold the official cash rate in October at 1.50%. The hold decision was the first handed down from the new Governor of the Reserve Bank, Dr Phillip Lowe. The decision came among concerns of weakness in the global banking sector, and signs of strength in the US economy.

Today’s hold decision may also be in anticipation of new inflation data. June quarter inflation was at just 1% for the year; a 17 year low, and well below the cash rate target band of 2-3%. Q3 figures will be released towards the end of October

The persistent strength of the AUD against the USD has factored into past RBA decisions this year. The RBA pursued a low cash rate in hopes it would de-value the Australian dollar, and keep export volumes buoyant.

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