No change for second month in a row
(06 March 2013 – Australia) The Reserve Bank of Australia (RBA) has kept interest rates at 3 percent for the second month in a row at its March board meeting on Tuesday.
Markets priced in an 11 percent chance the central bank would reduce the cash rate, with a majority of economists believing there would be no movement from the RBA.
The decision came after a raft of economic data released on Tuesday morning pointed to the suggestion that there were early signs the 50 basis points of cuts in October and December were filtering through to the economy.
Retail sales rose by 0.9 percent for the month of January, surpassing economists’ expectations, following three consecutive months of falls.
At the same time, the current account deficit narrowed and there was an increase in government spending for the fourth quarter of 2012.
RBA Governor, Glenn Stevens said in a statement that the board had decided it was prudent to leave the cash rate unchanged.
'At today's meeting, taking into account the flow of recent information and noting that there had been a substantial easing of policy as a result of previous decisions, the Board judged that it was prudent to leave the cash rate unchanged,' Stevens said.
'During 2012, there was a significant easing in monetary policy. Though the full impact of this will still take more time to become apparent, there are signs that the easier conditions are having some of the expected effects.'
Stevens noted again that the Australian dollar remained higher than expected, despite the fall in export prices and the low demand for credit as some Australians reduce their debt levels.
The decision came after a raft of economic data released on Tuesday morning pointed to the suggestion that there were early signs the 50 basis points of cuts in October and December were filtering through to the economy.
Retail sales rose by 0.9 percent for the month of January, surpassing economists’ expectations, following three consecutive months of falls.
At the same time, the current account deficit narrowed and there was an increase in government spending for the fourth quarter of 2012.
RBA Governor, Glenn Stevens said in a statement that the board had decided it was prudent to leave the cash rate unchanged.
'At today's meeting, taking into account the flow of recent information and noting that there had been a substantial easing of policy as a result of previous decisions, the Board judged that it was prudent to leave the cash rate unchanged,' Stevens said.
'During 2012, there was a significant easing in monetary policy. Though the full impact of this will still take more time to become apparent, there are signs that the easier conditions are having some of the expected effects.'
Stevens noted again that the Australian dollar remained higher than expected, despite the fall in export prices and the low demand for credit as some Australians reduce their debt levels.
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