RBA Keeps Interest Rates on Hold in October
The Reserve Bank of Australia has left the cash rate on hold for the 14th consecutive month, in a move widely expected.
It would appear from the RBA’s monthly statement, that they will continue to take a ‘wait and see’ approach and any rate change this year would be unlikely.
“In the Board’s judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates”, said Governor Glenn Stevens.
The RBA also stated that it expects moderate economic growth in Australia in the short term. “Overall, the Bank still expects growth to be a little below trend for the next several quarters”, said Stevens. This was likely to be a key factor in the RBA’s decision to leave rates on hold again this month.
Whilst a falling Australian dollar and increasing property prices are factors that may see the RBA increase rates next year, reduced spending in the resources sector, unemployment and China’s weakening property market all indicate that the RBA is very unlikely to increase rates for the rest of 2014.