"The message is entirely consistent with a neutral stance. There's a bit more emphasis on reminding people that the full effects of the interest rate cuts are going to take time to filter through to the economy. So it just suggests they're giving the data the time to react."
-Joshua Williamson, a senior economist at Citigroup Inc.
Analysts are split on whether Australian authorities will cut interest rates before the end of this year or not, after the Reserve Bank of Australia refrained from additional stimulus measures on the back of strong property market. Governor Glenn Stevens and his board left the key overnight cash-rate at all-time low of 2.5%, widely meeting analysts' expectations. According to the RBA, the current policy remains appropriate and saying they will remain in the "wait-and-see" mode looking for the effect of previous rate cuts.
The RBA also said consumer prices remain consistent with the medium-term target, while the domestic currency, which still remains highly overvalued, stays almost 10% below the April's level. Furthermore, retail sales climbed more than expected in August, while housing prices soared to a record high. Under Tony Abbott's leadership the economy is likely to be rebalanced from waning mining investment, as the government has already pledged to implement structural reforms. Amid these news business sentiment surged to the highest since May 2011, with sentiment lifting in all industries. And while traders are betting on another rate cut until December, the latest data is suggesting the Oz economy will start gaining momentum in the nearest future.
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