HALISTER1: RBA Leaves Key Rate at 1.5% as Seen by 27 of 28 Economists

RBA Leaves Key Rate at 1.5% as Seen by 27 of 28 Economists

(Bloomberg) -- Central bank leaves interest rates unchanged as upswing in global commodity prices eases impact of slower economic growth.
  • Prices of Australia’s two biggest exports, iron ore and coal, have strengthened in past year, lifting nation’s terms of trade
  • House prices continue to rise in Sydney; RBA Governor Philip Lowe is loath to add further fuel to market through lower rates
  • Unemployment remains below 6%, even though much of the recent hiring has been for part-time positions
  • Inflation is still below the central bank’s 2%-3% target; Aussie dollar climbed more than 5% in January, reflecting higher commodity prices though likely compressing import prices
  • NOTE: Since taking the helm in September, Lowe has stressed the flexibility of the RBA’s inflation target and voiced concern further easing could start to pose a risk to financial stability
  • NOTE: RBA cut rates in May and August in response to weak quarterly inflation
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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