Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


RBA drops easing bias, signals steady rates

Australian central bank drops reference to ‘policy adjustments,’ signals steady rates

Feb. 4 (BusinessDesk) – The Reserve Bank of Australia kept its benchmark interest rate at a record low 2.5 percent and dropped its reference to policy adjustments in favour of stability, a move seen as code for an end to its easing bias that sent its currency up about 1 US cent.

“Monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target,” Governor Glenn Stevens said in a statement. “On present indications, the most prudent course is likely to be a period of stability in interest rates.”

Stevens also dropped reference to the Australian dollar being “uncomfortably high”. The currency dollar jumped to 88.54 US cents from 87.57 cents immediately before the statement. The kiwi dollar tumbled to 91.45 Australian cents from 92.33 cents on speculation the gap with the Reserve Bank of New Zealand’s 2.5 percent official cash rate may not open as wide as expected.

Stevens hardened up the language of his latest statement compared to those for the policy reviews in the latter part of 2013.

“In Australia, information becoming available over the summer suggests slightly firmer consumer demand and foreshadows a solid expansion in housing construction,” he said. “Some indicators of business conditions and confidence have shown improvement.”

In his last statement on Dec. 3, he noted that the economy had been growing a bit below trend over the past year. Today he also noted that inflation in the fourth quarter was higher than expected, sitting at 2.7 percent, above the mid-point of the bank’s 2 percent to 3 percent target range.

While economic growth was expected to remain below trend “for a time yet and unemployment rise further before it peaks” the economy would strengthen beyond the short-term, “helped by continued low interest rates and the lower exchange rate,” while inflation was expected to be “somewhat higher” than was forecast three months ago.

The decline in the Australian dollar, which had soared to US$105.82 in April last year, “will assist in achieving balanced growth in the economy,” if sustained, Stevens said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news