- Reserve Bank of Australia
The Reserve Bank of Australia still believes that the nation's currency is too strong and that interest rates should be kept unchanged, rather than to be reduced further. The policy makers made no indication that it intends to ease monetary policy further despite investors' speculation that the central bank will cut rates next year given growing concerns over the Australian economy. Expectations of interest rate cuts have surged after Australia recorded third quarter economic growth of 0.3%, against market expectations. Several trustworthy forecasters, including economists at Westpac, Goldman Sachs, National Australia Bank, Deutsche Bank and AMP Capital see the RBA slashing interest rate next year.
The central bank raised fresh concerns about the strength of the Australian Dollar, saying that monetary policies of other central banks are causing the exchange rate to remain elevated, which is limiting growth in Australia's economy. It highlighted once again the Aussie Dollar remained above most estimates of its fundamental value, especially considering recent significant falls in commodity prices. Thus, the board agreed that further Aussie's depreciation was likely to be needed to achieve balanced growth in the economy. The RBA officials also expressed concern about sluggish employment growth that was likely to weigh on consumer confidence and consumer spending for some time.
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