The Reserve Bank of Australia (RBA) has moved in line with expectations and kept Australia’s official cash rate unchanged at a record low of 2.75 per cent.
RBA Governor Glenn Stevens says easier financial conditions now in place will contribute to a strengthening of growth over time.
While maintaining the monetary policy stance is appropriate for the time being, the Board left the door open for further easing given the inflation outlook.
The Australian dollar dropped on the news and in his commentary, Mr Stevens noted the dollar has depreciated by around 10 per cent since early April, but it remains at a high level.
He says it’s possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy.
FNN spoke to St George Chief Economist Hans Kunnen, who says the RBA is likely to cut further down the track.
