The Reserve Bank of Australia (RBA) has left interest rates unchanged at its monthly meeting today, with Governor Glenn Stevens saying it doesn’t appear the world economy is headed for another deep downturn.
The RBA has left rates on hold for two months in a row now, after cutting them in November and December last year. Stevens said that although the world economy’s growth is below-trend, there’s no indication a deep downturn is occurring.
“Several European countries will record very weak outcomes, but the US economy is continuing a moderate expansion. Growth in China has moderated as was intended, but on most indicators remains quite robust overall,” he said.
Stevens said growth in the Australian economy remains close to trend overall, with inflation sitting close to target at around 2.5 percent, and though borrower interest rates have risen slightly since the bank last met, they remain close to the medium-term average.
“Should demand conditions weaken materially, the inflation outlook would provide scope for easier monetary policy. The Board will continue to monitor information on economic and financial conditions and adjust the cash rate as necessary to foster sustainable growth and low inflation,” Stevens added.
