The RBA gives Christmas gift
(2 December 2009 – Australia) The Reserve Bank of Australia announced, after its board meeting in Sydney yesterday, that it has raised the official cash rate a further 25 basis points to 3.75 percent.
The increase, if passed on to home owners, will add almost A$50 a month onto a A$300,000 mortgage.
The Reserve Bank said the reason behind the third consecutive increase, was that the global economy has resumed growth and the financial markets have improved considerably during 2009.
Overall, in Australia, the downturn was relatively mild, and measures of confidence and business conditions suggest that the economy is in a gradual recovery. However the recovery will probably remain modest in the most major countries, due to the continuing legacy of the financial crisis, the RBA highlighted.
The central bank also said that credit for housing has been expanding at a solid pace, and dwelling prices have risen significantly over the year.
With the risk of serious economic contraction in Australia having passed, the Board has moved at recent meetings to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker, the RBA added.
These material adjustments to the stance of monetary policy will, in the Board’s view, work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead, the board concluded.
The Reserve Bank said the reason behind the third consecutive increase, was that the global economy has resumed growth and the financial markets have improved considerably during 2009.
Overall, in Australia, the downturn was relatively mild, and measures of confidence and business conditions suggest that the economy is in a gradual recovery. However the recovery will probably remain modest in the most major countries, due to the continuing legacy of the financial crisis, the RBA highlighted.
The central bank also said that credit for housing has been expanding at a solid pace, and dwelling prices have risen significantly over the year.
With the risk of serious economic contraction in Australia having passed, the Board has moved at recent meetings to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker, the RBA added.
These material adjustments to the stance of monetary policy will, in the Board’s view, work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead, the board concluded.
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