Rates on hold due to inflation
(7 November 2012 – Australia) Rates were left on hold again this month by the Reserve Bank of Australia (RBA) making this the first Melbourne Cup day in six years that rates remained unchanged.
The RBA cut the official cash rate by 25 basis points in October to 3.25 percent; it was a surprise to many that a further rate cut was not made.
Many analysts cite a robust September quarter inflation reading, partly due to the introduction of the carbon tax.
'With prices data slightly higher than expected and recent information on the world economy slightly more positive, the board judged that the stance of monetary policy was appropriate for the time being,’’ said RBA governor Glenn Stevens in the accompanying statement.
'The introduction of the carbon price affected consumer prices in the September quarter, and there could be some further small effects over the next couple of quarters.'
The RBA also stressed that the full effect of the 150 basis points in cuts it’s made since November 2011 had not been be felt by consumers and businesses.
'Further effects of actions already taken to ease monetary policy can be expected over time,’’ said Stevens.
'The Board will continue to monitor those effects, together with information about the various other factors affecting the outlook for growth and inflation.'
Many analysts cite a robust September quarter inflation reading, partly due to the introduction of the carbon tax.
'With prices data slightly higher than expected and recent information on the world economy slightly more positive, the board judged that the stance of monetary policy was appropriate for the time being,’’ said RBA governor Glenn Stevens in the accompanying statement.
'The introduction of the carbon price affected consumer prices in the September quarter, and there could be some further small effects over the next couple of quarters.'
The RBA also stressed that the full effect of the 150 basis points in cuts it’s made since November 2011 had not been be felt by consumers and businesses.
'Further effects of actions already taken to ease monetary policy can be expected over time,’’ said Stevens.
'The Board will continue to monitor those effects, together with information about the various other factors affecting the outlook for growth and inflation.'
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