- Reserve Bank of Australia
The Reserve Bank of Australia painted a rosier picture of the nation's economy and seemed in no rush to deliver another interest rate cut. The central bank said low borrowing costs are supporting household spending, while weaker exchange rate is aiding companies, even as it repeated the view that a subdued inflation outlook gives scope to ease monetary policy further, if growth slows. During the last board meeting, the RBA kept the official cash rate at a record low level of 2% for the seventh month in a row, after lowering rates twice this year, in February and May.
The RBA noted robust employment growth and survey showing above average conditions for companies. October's labour data surpassed even the most upbeat forecasts, with job growth soaring by 56,100, pushing the unemployment rate to 5.9%, down from 6.2%. Australian firms in industries such as tourism, education and manufacturing have been aided by a 30% plunge in the Australian Dollar since the beginning of 2013. The central bank is also waiting for the Fed's rate decision later in the week, when policy makers are expected to start normalizing its monetary policy for the first time in almost a decade, potentially exerting a downward pressure on the Australian currency as a rate differential narrows.
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