"The easing in monetary policy that has already occurred since late 2011 has supported interest-sensitive spending and asset values. The full effects of these decisions are still coming through, and will be for a while yet."
- Glenn Stevens, RBA Governor
It was not a surprise that the Reserve Bank of Australia maintained its loose policy stance on Tuesday, keeping the benchmark interest rate at a half-century low of 2.5%, in a bid to revive the resource-rich economy from tis post-mining-boom woes. The decision was widely tipped by analysts, given the latest improvements in the jobless rate, retail sales as well as building approvals. Oz central bank has made adjustments to its interest rate 10 times in November since it started publicly announcing its monetary policy decision in 1990. Despite some improvements in the economy, the RBA signalled they would look for stronger signs of accelerating activity in the property market, manufacturing and retail industries before it would prepare to shift rates from current level. And even though uncertainty surrounds economic outlook, according to the RBA, demand outside the mining sector would pick up, providing additional boost for the economy.
Soon after the report the Aussie ended its two-day gain against the U.S. counterpart, falling almost 0.3% to 0.948. Glenn Stevens pointed out he is counting now on a weakening in the exchange rate in order to re-adjust nation's growth model. Despite the fact the RBA is looking for a weaker Aussie, analysts see little chance of another rate cut in the next six months.
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