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 2.5 per cent.
RBA Governor Glenn Stevens says overall global financial conditions remain very accomodative.
He says volatility in financial markets has increased and has affected a number of emerging market economies in particular.
While maintaining the monetary policy stance is appropriate for the time being, the Board will continue to assess the outlook and adjust policy as needed.
The Australian dollar firmed on the news and in his commentary, Mr Stevens noted the dollar has depreciated by around 15 per cent since early April, but it remains at a high level. Mr Stevens says it is 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 AMP Capital Capital Chief Economist, who says he anticipated the decision.
Reserve Bank of Australia, RBA, Glenn Stevens, September board meeting
