The Reserve Bank of Australia (RBA) at its monetary policy meeting held today, left the official cash rate (OCR) unchanged at a record low of 1.50 percent for the twentieth consecutive meeting.
The RBA statement read: “The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
With regard to the inflation level, the RBA added: “Inflation is low and is likely to remain so for some time, reflecting low growth in labor costs and strong competition in retailing. A gradual pick-up in inflation is, however, expected as the economy strengthens. The central forecast is for CPI inflation to be a bit above 2 per cent in 2018.”
On the exchange rate value: “The Australian dollar remains within the range that it has been in over the past two years. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.”
On housing markets: “The housing markets in Sydney and Melbourne have slowed. Nationwide measures of housing prices are little changed over the past six months, with prices having recorded falls in some areas. Housing credit growth has slowed over the past year, especially to investors.”
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