by
Elizabeth Moran | Nov 05, 2013
At yesterday’s RBA meeting, the board deemed the setting of monetary policy as appropriate and the cash rate was kept on hold.
In the Statement, Glenn Stevens’ commented:
“In Australia, the economy has been growing a bit below trend over the past year and the unemployment rate has edged higher. This is likely to persist in the near term, as the economy adjusts to lower levels of mining investment. Further ahead, private demand outside the mining sector is expected to increase at a faster pace, though considerable uncertainty surrounds this outlook. There has been an improvement in indicators of household and business sentiment recently, but it is still too soon to judge how persistent this will be. Public spending is forecast to be quite weak.”
Inflation is considered to be “consistent with the medium term target”.
The full effects of past decisions are still coming through and will be for a while yet. “Overall, global financial conditions remain very accommodative. Volatility in financial markets has abated recently. Long-term interest rates remain very low and there is ample funding available for creditworthy borrowers.”
Economists are divided about whether the RBA will cut rates further in coming months, with financial markets anticipating one more rate cut with about 50 per cent probability over the next six months.