"While further reductions may be required, on the information currently to hand it was appropriate to hold rates steady"
- Reserve Bank of Australia
Australian leading index improved in the first month of this year, suggesting that the economy is on the path of recovery, the Conference Board said Friday. A combined reading of 7 economic indicators related to money supply, building approvals, profits, exports, inventories and interest rate spreads, jumped 0.2% in January, after contracting by 0.1% a month earlier. A measure of current economic activity also increased slightly in January. Despite the increase, the coincident economic index was flat between July 2012 and January 2013, down from the 1.1% increase for the preceding six months. Earlier this month, the Reserve Bank of Australia said that Australian economy is already responding to low interest rates and already starts showing signs of stabilisation.
"While further reductions may be required, on the information currently to hand it was appropriate to hold rates steady," the Reserve Bank of Australia said in the minutes of its March 5 policy meeting, published today.
"We continue to get a sense that the RBA remains in wait and see mode," said Alvin Pontoh, an Asia-Pacific strategist at TD Securities Inc. in Singapore. "There is some chance that the bank's easing bias is softened at the next communique."
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