RBA meeting July 2011: Rates On Hold at 4.75%

Jul 05, 2011 - Boris Chan

Eight month in a row the Reserve Bank of Australia (RBA) has left official interest rates unchanged at 4.75 per cent at its board meeting on July 5, 2011.

RBA decision to keep the official cash rate on hold today met the expectation of financial markets:

  • The global economy is continuing its expansion, but at a slower pace.
  • Australia's terms of trade are now at very high levels and national income has been growing strongly, though conditions vary significantly across industries.
  • A gradual recovery from the floods and cyclones over the summer is taking place.
  • Growth in employment has moderated over recent months and the unemployment rate has been little changed, near 5 per cent.
  • Credit growth remains modest.
  • Year-ended CPI inflation is likely to remain elevated in the near term, however, as the temporary price shocks dissipate, CPI inflation is expected to be close to target.

So the Board judged that the current mildly restrictive stance of monetary policy remained appropriate. In future meetings, the Board will continue to assess carefully the evolving outlook for growth and inflation.

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