Australian Reserve Bank keeps cash rate on hold

Sydney, July 2 (IANS) The board of the Reserve Bank of Australia left the cash rate unchanged at its meeting Tuesday, holding steady at 2.75 percent as expected.

Glenn Stevens, governor of the Monetary Policy Decision, said global growth was running a bit below average this year, but with reasonable prospects of a pick-up in 2014, reported Xinhua.

Commodity prices have further declined, yet remain at relatively high levels, and inflation has moderated in recent months in a number of countries.

The recent Australian accounts confirmed that the national economy has also been growing below trend recently, said Stevens, and is expected to continue in the near term as the economy adjusts to lower levels of mining investment.

The Australian dollar has also lowered by about 10 percent since early April, though it is still at a high level. Inflation remains consistent with the Australian medium-turn target and is expected to continue over the next couple of years. Potential depreciation of the dollar over time may help rebalance growth in the economy.

The board judged that easier global financial conditions will contribute to stronger growth over time, in line with the inflation target, and decided that “the stance of monetary policy remained appropriate for the time being”.

However, not to be tied down, the inflation outlook may provide scope for further easing, Stevens added, should that be required to support demand.

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