RBA leaves cash rate at 4.75%
(5 April 2011 − Australia) For the fifth straight month, the Reserve Bank of Australia (RBA) has left the cash rate on hold at 4.75 percent.
RBA governor Glenn Stevens said in a statement that the current strength in the Australian dollar has helped keep inflation within the RBA’s medium term target, while there had been a fall in wages growth and strong competition in key markets.
He said the global economy is continuing its expansion, especially within the Asia region. Despite the recent disaster in Japan; the RBA expects the noticeable effect on Japanese production to be near-term, while impact on the broader Asia region is expected to be limited.
"Australia’s terms of trade are at their highest level since the early 1950s and national income is growing strongly.
"Private investment is picking up, mainly in the resources sector, in response to high levels of commodity prices. In the household sector thus far, in contrast, there continues to be caution in spending and borrowing, and a higher rate of saving out of current income," Mr Stevens said.
He cited the recent natural disasters for reducing output, raising prices for some agricultural produce and therefore boosting the March quarter CPI, but said these prices should fall back later in the year, overall being temporary effects.
He said the Bank expects that inflation over the year ahead will continue to be consistent with the 2-3 percent target.
He said the global economy is continuing its expansion, especially within the Asia region. Despite the recent disaster in Japan; the RBA expects the noticeable effect on Japanese production to be near-term, while impact on the broader Asia region is expected to be limited.
"Australia’s terms of trade are at their highest level since the early 1950s and national income is growing strongly.
"Private investment is picking up, mainly in the resources sector, in response to high levels of commodity prices. In the household sector thus far, in contrast, there continues to be caution in spending and borrowing, and a higher rate of saving out of current income," Mr Stevens said.
He cited the recent natural disasters for reducing output, raising prices for some agricultural produce and therefore boosting the March quarter CPI, but said these prices should fall back later in the year, overall being temporary effects.
He said the Bank expects that inflation over the year ahead will continue to be consistent with the 2-3 percent target.
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