Australia’s central bank leaves cash rate unchanged at 1.5%
The Reserve Bank of Australia decided to leave the cash rate unchanged at 1.50%.
In one of its most anticipated decisions since the bank last cut interest rates in August 2016, the RBA decided on Tuesday to leave the cash rate unchanged at 1.5%
The decision marks the RBA's first for 2019, after a two-month hiatus over the holiday period.
IG market analyst, Kyle Rodda says it was a widely expected decision given policy makers had been signalling a steady outlook for some time.
However, financial markets had been factoring in a more than a 50% chance that the rate decision would be lowered by 25 basis points by the end of the year.
This was mainly due to the economic data releases in China, and abroad which had shown significantly weaker than expected results since December. These have in turn renewed fears of a slowing global economy.
RBA Governor Phillip Lowe said,‘The trade tensions are affecting global trade and some investment decisions. Growth in the Chinese economy has continued to slow, with the authorities easing policy while continuing to pay close attention to the risks in the financial sector.’ In the RBA’s monetary policy decision.
The RBA adjusted their lower growth outlook from 3.5% to 3% but remained upbeat.
Australian Dollar Price
The Australian dollar against the greenback was already on the defensive following weak Australian retail sales, and traded above $0.7240 at time of writing, slightly up from the $0.721 just before the RBA decision.