RBA leaves rates unchanged
The Reserve Bank of Australia (RBA) has decided to leave the official cash rate at 2% at its July board meeting.
Announcing the decision, RBA governor Glenn Stevens said holding rates at current levels was appropriate.
“Information on economic and financial conditions to be received over the period ahead will inform the board’s assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target,” he said.
Mr Stevens said the lower interest rates were supporting borrowing and spending and credit was recording moderate growth with stronger borrowing by businesses and households.
“In Australia, the available information suggests that the economy has continued to grow over the past year, but at a rate somewhat below its longer-term average. The rate of unemployment, though elevated, has been little changed recently,” he said.
“Overall, the economy is likely to be operating with a degree of spare capacity for some time yet. With very slow growth in labour costs, inflation is forecast to remain consistent with the target over the next one to two years, even with a lower exchange rate.”