We just the Reserve Bank of Australia monetary policy decision for March
- Rates left on hold at 1.5%
- Access the main points, and the full text, of the statement by Governor Lowe accompanying the statement here
Lowe says the Bank left the rate unchanged as doing so is consistent with the growth and inflation targets.
Mmmmm, really?
Let me think out loud:
- Wage growth is dreadfully slow, holding back consumption
- Parts of the country are in a bad
recession(OK, can't use that word) economic transition (think mining areas where growth has evaporated (and gone negative) with the capex cliff
For me these argue for a rate cut, rates are too high for places like Western Australia and much of Queensland (for example). A rate cu might take some upward pressure of the currency too.
BUT ...House price growth in Sydney and Melbourne is rampant, rates are far too low in these cities.
So, is the RBA keeping rates on hold because "Unchanged policy consistent with growth, inflation targets"
OR, are they just stuck, with no effective tools to do much at all so, well ... so, let's do nothing ... ?
I don't have any answers, the policy tools available to the RBA are very limited (up, down, sideways ... that's about it ... apart from some macro-prudential tools).
Over to ForexLive ...
