Members of the board of the Reserve Bank of Australia concluded that the federal government’s two fiscal stimulus’ have done a substantial job in propping the country’s ailing economy. “Members observed that there were signs that the economic stimulus that had been applied was supporting demand,” minutes showed. As such, there was no need to continue cutting the overnight cash rate. The decision was not without opposition. In fact the Board face the question “whether monetary policy should be eased further at this stage.”
On growth, the RBA sees Asia as key to their own personal development. Rising demand from China will likely continue driving Australia’s export sector which primarily relies on iron ore and coal. In a speech given by RBA Governor Kevin Rudd earlier today, the chief banker stated his case for such a position.