As expected, the Reserve Bank of Australia Board decided to again leave the cash rate unchanged at 2.50% for the eighth straight month at its April meeting last week. The Governor's statement accompanying the decision provided us with no new information, retaining the key phrase that, "on present indications, the most prudent course is likely to be a period of stability in interest rates".
The remainder of the statement was largely unchanged from that following the previous (March) meeting, with tweaks suggesting slightly more confidence that domestic conditions are evolving in line with expectations, but noting that China's growth may have slowed, as well as reduced assistance from the Australian Dollar which has moved higher over the past few months.
A lower cash rate is highly unlikely from here but there is also little evidence that the RBA is thinking that they need to raise the cash rate in the near future either.
Rural Bank’s Weekly Economic Commentary will not be distributed from Monday 14 April until Friday 9 May due to annual leave.
We look forward to talking to you again on Monday 12 May.