RBA leaves cash rate unchanged at 1.00% as widely expected

The Reserve Bank of Australia (RBA) decided to leave the cash rate unchanged at 1.00 percent at its September monetary policy meeting. The move was widely expected by the markets.

In its statement accompanying the decision, the regulator noted it will ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time. It also added that “it is reasonable to expect that an extended period of low interest rates will be required in Australia to make progress in reducing unemployment and achieve more assured progress towards the inflation target”.

According to the RBA, “the outlook for the global economy remains reasonable, although the risks are tilted to the downside”. In regard to outlook on Australia, the growth “is expected to strengthen gradually to be around trend over the next couple of years”, supported by the low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilization in some established housing markets and a brighter outlook for the resources sector. However, “the main domestic uncertainty continues to be the outlook for consumption”, the bank added. The Australian central bank also noted that “the Australian dollar is at its lowest level of recent times”, while “wages growth remains subdued and there is little upward pressure at present, with strong labour demand being met by more supply”.