Reserve Bank of Australia steers rates on steady course, as widely expected

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 twenty-first straight 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 labour 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 has depreciated a little, but remains within the range that it has been in over the past two years.”

On housing markets: “Nationwide measures of housing prices are little changed over the past six months. Conditions in the Sydney and Melbourne housing markets have eased, with prices declining in both markets. Housing credit growth has declined, with investor demand having slowed noticeably.”