At its meeting today, the Reserve Bank of Australia have decided to leave the cash rate unchanged at 1.50%
The global economy has strengthened over the past year. A number of advanced economies are growing at an above-trend rate and unemployment rates are low.
Globally, inflation remains low, although it has increased in some economies and further increases are expected given the tight labour markets.
- Financial markets have been affected by political developments in the eurozone, particularly in Italy. There are also concerns about the direction of international trade policy in the United States and economic developments in a few emerging market economies.
- The price of oil has increased over recent months, as have the prices of some base metals. Australia's terms of trade are expected to decline over the next few years, but remain at a relatively high level.
- 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.
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.
To view the full statement of Phillip Lowe, Governor of the Reserve Bank, please click here.
Published : 05 Jun 2018