- Reserve Bank of Australia
While weak inflation provides scope for further interest rate cuts, the Reserve Bank of Australia welcomed the nation's economy rebalancing. However, the central bank remained cautious amid signs that global volatility was impacting domestic demand. Minutes from the RBA's policy meeting showed that central bank retained easing bias in March, but it sees no immediate need for further reductions in the key interest rate. Economists are divided about whether the RBA will lower its cash rate from all-time low 2.0%, with some predicting two cuts in 2016, while other anticipate that the central bank will sit tight for the remained of the year.
The RBA was contented with the progress the Australian economy is making in rebalancing towards non-mining sectors of the economy, helped by low interest rates and the depreciation of the exchange rate over the past couple of years. However, like most central banks, the RBA has become increasingly worried about the global financial conditions since the beginning of the year, with fears over China's economic health and uncertainty surrounding outlook for monetary policy in some major economies which has lead to elevated market volatility. Moreover, policy makers acknowledged that employment growth stalled in January following a robust gain in late 2015, while the jobless rate returned to 6%. Yet, the RBA noted that conditions in the labour market have noticeably improved since early 2015.
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