RBA meeting May 2011: Rates Unchanged at 4.75%

May 03, 2011 - Boris Chan

As widely expected, the Reserve Bank of Australia (RBA) has left official interest rates unchanged at 4.75 per cent at its board meeting on May 3, 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.
  • Australia's terms of trade are reaching higher levels than assumed a few months ago.
  • The natural disasters over the summer have reduced output in some key sectors, but overall growth is likely to be at trend or higher.
  • Growth in employment has moderated and further growth in employment most likely will be at a slower pace than in 2010.
  • Overall credit growth remains quite modest.
  • CPI inflation will be close to target over the year ahead, as the temporary price shocks dissipate over the coming quarters.

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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