RBA leaves cash rate unchanged
(2 September 2015 – Australia) The Reserve Bank of Australia (RBA) has left the overnight cash rate unchanged at 2.0 percent.
In a statement following the decision on 1 September, RBA governor Glenn Stevens said that while Australia’s rate of growth is below longer-term averages, it has been associated with stronger growth of employment and a steady rate of unemployment over the past year.
The RBA Board’s judgement was that overall, the economy is likely to be operating with a degree of spare capacity for some time yet.
“Equity markets have been considerably more volatile of late, associated with developments in China, though other financial markets have been relatively stable.
“Long-term borrowing rates for most sovereigns and creditworthy private borrowers remain remarkably low.
“Overall, global financial conditions remain very accommodative.”
Stevens said these circumstances call for accommodative monetary policy with low interest rates acting to support borrowing and spending.
The statement said credit is recording moderate growth overall, with growth in lending to the housing market broadly steady over recent months.
Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities.
The Bank is working with other regulators to assess and contain risks that may arise from the housing market.
In other asset markets, prices for equities and commercial property have been supported by lower long-term interest rates.
The Australian dollar is adjusting to the significant declines in key commodity prices.
“Further information on economic and financial conditions to be received over the period ahead will inform the Board's ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.
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