The Reserve Bank of Australia announced that it had decided to leave its cash rate unchanged at 2.5% last week for the 14th consecutive time, as was widely expected. This was a decision consistent with an economy expected to grow below average “for the next several quarters”.
The RBA’s quarterly Statement on Monetary Policy was released on Friday and was little changed from their August Statement. The Statement maintained that a “period of stability in interest rates” is most likely and confirms the view that the official cash rate will remain on hold until well into next year.
On markets, while interest rates were relatively steady last week, equities continued their drift higher while the Australian dollar continued its downward trend thanks to a firmer US dollar and lower commodity prices.