RBA keeps interest rates on hold at 2%
2015-06-03
There were no surprises from the RBA today with the central bank doing what most economists predicted – keeping interest rates on hold at 2%.
After two rate cuts already this year, in February and May, many experts now believe rates will remain steady at record lows for much of the rest of the year.
“We’re at 2% and the economy is ok – it’s not strong, but certainly not any weaker than it was, Market Economics managing director Stephen Koukoulas told realestate.com.au last week.
In a statement detailing the Reserve Bank’s decision RBA Governor Glenn Stevens notes the Australian economy is growing, but at a slower rate than the long-term average.
“Household spending has improved, including a large rise in dwelling construction, and exports are rising. But a key drag on private demand is weakness in business capital expenditure in both the mining and non-mining sectors and this is likely to persist over the coming year. Public spending is also scheduled to be subdued,” Stevens says.
“Overall, the economy is likely to be operating with a degree of spare capacity for some time yet. With very slow growth in labour costs, inflation is forecast to remain consistent with the target over the next one to two years, even with a lower exchange rate.”
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