RBA leaves cash rate on hold 1
The Reserve Bank of Australia Board has today left the official cash rate unchanged at 4.5 percent
July 6, 2010The Reserve Bank of Australia (RBA) Board has today left the official cash rate unchanged at 4.5 percent.
The decision comes amid continuing economic uncertainty in European markets.
"In Europe, while output in some key countries has been improving recently, prospects for next year are more uncertain given the budgetary constraints governments face and the pressure on euro area banks," RBA Governor Glenn Stevens said after this afternoon’s meeting.
"Financial prices have been more volatile and equity prices and government bond yields in major countries have declined," he says.
One a positive note, Stevens says most indicators suggest business investment will increase over the coming year.
"Business credit appears to have stabilised, though credit conditions for some sectors remain difficult," he says.
"Credit outstanding for housing has continued to expand at a solid pace, but dwelling prices are rising more slowly than earlier in the year."
As a final point, Stevens says underlying inflation appears likely to be in the upper half of the target zone over the next year.
"The rate of CPI increase is likely to be a little above 3 percent in the near term, due to the effects of increases in tobacco taxes announced earlier in the year and significant increases in prices for utilities," he says.
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