"The RBA is in no hurry to move interest rates and will wait for the data to push them into action"
- Joshua Williamson, a senior economist at Citigroup Inc.
The Reserve Bank of Australia left its monetary policy on hold, saying the depreciation in Aussie may continue as well as rock-bottom borrowing costs are likely to bolster the local economy further. For the second consecutive month the RBA policy members kept the benchmark interest rate at a record low of 2.75%, although many economists are still betting on another rate-cut before Christmas. A 12% slide in the Australian Dollar during the last helped buoy manufacturing sentiment, providing more room for maneuver for the Governor to cut rates again. The nation's central bank lowered interest rate by 2% since late 2011, in order to shift growth toward employment-intensive industries, like construction as the output from mining sector is expected to wane.
A bunch of economic data is showing some positive signs for the economy, as the unemployment rate dropped unexpectedly to 5.5% in May, down from a revised 5.6% a month earlier. Moreover, consumer confidence jumped 4.7% last month, supported by the outweighed number of optimists in a private survey. At the same time Australian state and territory capitals jumped 3% in the half of 2013, and 1.9% in June only, data from the RP Data-Rismark showed. Spending on major mining and energy projects, however, remains at a record high of $268 million.
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