- Glenn Stevens, RBA Governor
Testifying before the House of Representatives Economics Committee, RBA Governor Glenn Stevens said that the Australian economy continued to grow at a sub-trend pace, but a weaker Aussie Dollar and easy monetary policy is supporting growth. Stevens stressed that further easing is possible if inflation slows and global headwinds threaten Australia's growth trajectory. The central bank head estimated that inflation is unlikely to cause near-term issues over the next two years though, partly due to the weakening Australian Dollar, which was tracking falling commodity prices. Like most other central banks, the RBA noted the elevated risks associated with recent market volatility.
The RBA cut the official cash rate two times last year in an attempt to cushion Australia's post-mining boom economy, helping to push exchange rate lower amid the commodity downturn. Stevens confirmed that rates are likely to remain steady for most or all of 2016. With regards to China, Australia's key trading partner, Stevens said that the world's second largest economy is growing weaker than its officials want and that "some observers" have expressed concern. Stevens believes that a portion of international pessimism is overdone. China has faced capital outflows and has been the driver for market turbulence, which the RBA thinks is due to policy uncertainty.
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