RBA Leaves Official Cash Rate Unchanged – Please Read On…
Disclaimer: As always AND before I go on , I’m not offering financial advice; you should always get qualified professional advice when making financial decisions. What I am doing is letting you know what has worked for me and giving you the opportunity to check it out for yourself. This mesage is intended to provide general news and information only. Readers should rely on their own enquiries before making any decisions regarding their own interests. Please do not rely on any part of this mesage as a substitute for specific legal or financial advice. All material is copyright 2008
At its meeting today, the RBA Board decided to leave the official cash rate unchanged at 7.25 per cent. Whilst interest rate moves are being keenly watched by all where possible I’ll continue to update you on the result of each RBA meeting. If you have any questions in general about interest rates, or would like to review part of or your whole portfolios feel free to let me know… send me an email to george@georgemihos.com for further details.
Statement by Glenn Stevens, Governor Monetary Policy RBA
Inflation in Australia has been high over the past year in an environment of limited spare capacity and earlier strong growth in demand. In these circumstances, the Board has been seeking to restrain demand in order to reduce inflation over time. As a result of earlier decisions by the Board, additional rises in market interest rates and tougher credit standards for some borrowers, there has been a substantial tightening in financial conditions since the middle of last year.
Conditions in international financial markets remain difficult, with credit concerns resurfacing in the past month. The evidence is that the tightening in financial conditions, in conjunction with other factors including rising fuel costs, is working to restrain demand. Indicators of household spending have recorded subdued outcomes over recent months, and credit expansion to both households and businesses has weakened significantly. There have also been some tentative signs of an easing in labour market conditions.
The rise in Australia’s terms of trade that is currently occurring will work in the opposite direction. It will add substantially to national income and ability to spend, even with the slowing in global growth to below-trend pace that the Bank is assuming. At the same time, rising prices of oil and a range of other commodities are adding to global inflationary risks.Given the opposing forces at work, considerable uncertainty remains about the outlook for demand and inflation. On balance, while the inflation outlook remains concerning, the Board’s assessment continues to be that demand growth will be moderate this year. The most recent flow of information has given additional support to that assessment.
Inflation is likely to remain relatively high in the short term, and the CPI will be further boosted in coming quarters by the recent rises in global oil prices. Looking further ahead, inflation in both CPI and underlying terms should decline over time, provided demand continues to evolve as expected.
Weighing up the available domestic and international information, the Board’s judgment is that the current stance of monetary policy remains appropriate. The Board will continue to evaluate prospects for economic activity and inflation in the light of new information.
Once again, if you have any questions in general about interest rates, or would like to review part of or your whole portfolios feel free to let me know… send me an email to george@georgemihos.com for further details.
Yours with Ethics and Passion
Disclaimer: As always AND before I go on , I’m not offering financial advice; you should always get qualified professional advice when making financial decisions. What I am doing is letting you know what has worked for me and giving you the opportunity to check it out for yourself. This mesage is intended to provide general news and information only. Readers should rely on their own enquiries before making any decisions regarding their own interests. Please do not rely on any part of this mesage as a substitute for specific legal or financial advice. All material is copyright 2008
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Leave a comment