- Reserve Bank of Australia
The Reserve Bank of Australia reiterated once again its pledge to keep the official cash rate on hold and it will not alter it any time soon to help the economy through a tough transition in growth. It is widely expected that a hike will not come until the second half of 2015. Nevertheless, the minutes of the RBA September board meeting show policy makers are getting more optimistic about the economic outlook. The RBA said low interest rates continue to support some sectors of the economy and encouraged more risk-taking investment. However, the RBA's modelling points to the fact that the nation's currency may still be overvalued, even after its recent week-long slide. Thus, the central bank is impatient to see further weakening in the Australian Dollar to help give the economy a boost. On top of that, another area of concern appeared to be the housing market and homeowner's exposure to a potential downturn, as there is the possibility that speculation in the market could cloud the economic outlook. Along with that, recent data showed new vehicle sales in Australia declined in August for a second consecutive months, with demand for sport utilities falling slightly. Data of the Australian Bureau of Statistics showed 91,391 new vehicles were sold in August, down 1.8% from July's 93,051. The July result was revised to show a decline of 1.5%, from the original 1.3% fall. Sales of sports utility vehicles declined 3.7% in August, from July, snapping three months of growth in a row.
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