The Reserve Bank of Australia (RBA) has kept the official cash on hold at 2 per cent.
The decision came after two rate cuts already this year in February and again in May.
Explaining today’s decision the central bank noted key commodity prices have been weak but puts this down to increasing supply and weaker demand.
Emphasis was placed on the likelihood of the US Federal Reserve raising rates over the period ahead, observing that global financial conditions overall remain accommodative. The central bank also noted some softening in conditions in the Asian region.
Low interest rates continue to support borrowing and spending. The Reserve Bank noted that growth in lending to investors in the housing market has eased as supervisory measures continue to contain housing-market related risks.
Overall the prospects for an improvement in economic conditions have firmed a little in recent months. The Reserve Bank reiterated that inflation is low and should remain so. Policymakers noted that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand
But for now the RBA says the current cash rate is appropriate and it will continue to assess the outlook before making any changes.
The Aussie dollar pre-empted the announcement with a move to the downside, but bounced back to US$0.7270
