Tuesday, 07 May, 2019
(BFW) RBA Leaves Cash Rate Target Unchanged at 1.50%
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2019-05-07 04:32:20.877 GMT
By Garfield Reynolds
(Bloomberg) — Reserve Bank of Australia leaves key
interest rate unchanged at record-low 1.5% for 30th consecutive
meeting.
* RBA Governor Philip Lowe says in statement Tuesday: “The Board
judged that it was appropriate to hold the stance of policy
unchanged at this meeting. In doing so, it recognized that there
was still spare capacity in the economy and that a further
improvement in the labor market was likely to be needed for
inflation to be consistent with the target. Given this
assessment, the Board will be paying close attention to
developments in the labor market at its upcoming meetings.”
* Inflation remains weak: consumer prices were flat in the first
three months of the year and core inflation slowed
* Falling property prices — Sydney down 14.5% from 2017 peak —
are prompting households to rein in spending; consumption
accounts for nearly 60% of GDP
* Reflecting that, economic growth slowed to an annualized 1% in
the second half of last year from almost 4% in the first six
months
* Even so, unemployment is hovering near an eight-year low; it
probably needs to fall closer to 4% to drive meaningful wage
gains, based on levels already reached in Australia’s eastern
states and on international experience
* Aussie dollar is down about 1.5% in past month providing a bit
of a boost to exporters and import-competing industries
* NOTE: The RBA said in minutes of last month’s meeting that the
board discussed rate cuts in a review of policy scenarios and
concluded there was “not a strong case” for an adjustment in the
near term.
To contact the reporter on this story:
Garfield Reynolds in Sydney at greynolds1@bloomberg.net
To contact the editor responsible for this story:
Mark Cudmore at mcudmore8@bloomberg.net
