-Reserve Bank of Australia
Minutes of the Reserve Bank of Australia October policy meeting showed that central bankers became more focused on market volatility and global growth, with intensifying concerns over China, Japan and Europe. The RBA plans to keep official interest rates at a historic low of 2.5% until well into next year to support Australia's economy. The RBA said ongoing accommodative monetary policy should bolster demand and help growth strengthen over time. Governor Glenn Stevens has said that further cuts in the cash rate are unlikely as they would trigger a build-up of risk in the economy, where house prices have advanced an annual 14.3% in Sydney in September. The RBA last cut the official cash rate by 0.25 percentage point to a new historic low of 2.5% at the August 6 board meeting in 2013.
Minutes also showed officials' dissatisfaction with the nation's currency strength, as it still remains high by historic standards, especially given recent drops in commodity prices. Thus, the Australian Dollar provides a little help to rebalance the economy. The Aussie Dollar had declined about 6% versus the Greenback in the past three months, falling from the recent high of 95 US cents in July. The RBA said that a depreciation was mostly due to a strengthening of the US Dollar versus most major counterparts.
© Dukascopy Bank SA