-Reserve Bank of Australia
The Reserve Bank of Australia kept its official cash rate unchanged at 2.00%. While the rhetoric was largely unchanged, the RBA retained a soft easing bias. The central bank said the Australian economy continued to grow over the past year, albeit at a rate, which is below its long-term average. Overall, the economy is likely to perform with a degree of spare capacity for some time yet. In addition to that, given very slow growth in labour costs, inflation is seen to remain consistent with the target over the next one to two years, even with a lower exchange rate. The RBA reiterated its view that a further decline in the Australian dollar is seen as both "likely and necessary". On May 5 the RBA slashed the cash rate to 2%, and the bank was waiting to see what impact, if any, looser policy settings would have on growth.
Meanwhile, Australia's Melbourne Institute Monthly Inflation Gauge gained 0.1% in June following rises of 0.3% in May and April and 0.4% in March. Measured on a yearly basis, the inflation measure rose by 1.5% in June, after an increase of 1.4% in May. Automotive fuel was the main contributor to the overall price climb with 4.2% increase, while fruit and vegetables' prices added 0.7%. Separately, Australia and New Zealand Banking Group Job Advertisements monthly index rebounded in June, rising 1.3% following an almost flat result in May.
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