Reserve Bank of Australia Leaves Rate Steady, Removes Rate Easing Language

The Reserve Bank of Australia left its main policy rate steady at 3.0% for the fourth time. In the statement accompanying the interest rate decision, Governor Glenn Stevens implied that the interest rate perspective would no longer be biased toward the downside. He stated that the “present accommodative setting of monetary policy is appropriate given the economy’s circumstances.” The remarks here deviate significantly from that which appeared on the statement accompanying the previous meeting. In it, the RBA led the public to believe that it could commit to an increasingly dovish policy stance. That is “the Board’s current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed” the previous statement said.