November 04, 2015
At today’s Board meeting, the Reserve Bank of Australia has decided to leave the official cash rate on hold for the sixth consecutive month.
With consumer sentiment and business confidence both receiving a boost in recent weeks, following the Government spill and subsequent appointment of a new Prime Minister, it would appear as though there was no need for the Reserve Bank to change the current monetary policy setting.
According to the latest data from the Westpac Institute of Consumer Sentiment, confidence climbed 4.2% over the month of October. Further, data from National Australia Bank shows there was a partial recovery in business confidence, with financial market volatility and emerging market concerns moderating from the heights of the previous month.
Both of these factors combined gave the Reserve Bank no real push to cut the cash rate. Of course, just because the Reserve Bank has chosen not to cut the cash rate at today’s Board meeting, doesn’t mean to say we have seen the last of the rate cuts altogether.
If consumer sentiment, business confidence and economic growth perform sluggishly, we may see the Reserve Bank cut rates again.
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