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Rates Held At Record Lows

At its final meeting of the year, the Reserve Bank of Australia displayed a vote of confidence in the domestic economy by keeping rates on hold. Heading into the meeting, potential further easing from the bank expectations was split. Although the RBA remained on hold at its last meeting, Governor Lowe did signal that further easing could still be warranted in light of weak global conditions. However, disappointingly for AUD bears, the RBA opted to keep rates on hold this time around. This left the headline Australian interest rate at record lows of 0.75% into next year.

RBA Optimistic on Economy

The tone of the meeting statement was generally consistent with the message of recent months. The RBA is content with the positive impact being seen from recent rate cuts. Particularly in terms of the impact on the exchange rate and asset prices as well as the pas through to household incomes. Indeed, the RBA pointed to the “long and variable lags” of monetary policy a...

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