Bank of Australia left interest rates unchanged

Bank of Australia left interest rates unchanged

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As expected , most market participants , the Reserve Bank of Australia will decide to leave the interest rate unchanged at 2.5%. Analysts of TeleTrade resemble that Australia’s central bank left its benchmark in February interest rate unchanged at a record low . However , in a statement the regulator has not been any indication of further easing , indicating that financial tactics. “It is strong interest rates may be the most favorable option for the development of the economy ” – so said Glenn Stivenv , RBA . However , if necessary , the rates may be reduced .

It should be noted that this month the Reserve Bank of Australia raised its forecasts for economic growth and inflation . Representatives of the regulator noted that a weak currency support exports and imports simultaneously supports . Under these conditions, the RBA expects GDP growth by 2.75 % per annum, which will end in June 2014 . Additionally, certain features have been recorded some improvement in consumer spending and the recent rise in business sentiment . Regarding inflation expectations – for a short period they were revised upward .

In its accompanying statement, the RBA has refused to express an opinion on the ” overvalued ” Australian dollar . As representatives of the bank, the current exchange rate in Australia will support the reorientation of the economy .

Analysts of TeleTrade reminded that significant reductions in interest rates, implemented over the past two years , have led only to the segmented recovery in the Australian economy , rich in natural resources . However , the economy still continued to face a sharp slowdown in investment in the mining industry , resulting in unemployment has reached levels close to the maximum value observed during the financial crisis . Thus, the unemployment rate in Australia rose to 10- year high . This fact casts doubt on the strength of the regional economy , and opens a new perspective to the problem of the Central Bank of Australia – whether to cut interest rates.

Thus, the RBA , as expected , has not changed his tactics and left interest rates unchanged. First of all , it is necessary to continue to stabilize the economy , stabilize the exchange rate of the Australian dollar .

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