Weekend Economist: Rate respite

Current economic data is giving the RBA enough room to hold rates indefinitely but that may not last the year.

As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 2.50 per cent at its March meeting and maintained the ‘neutral’ outlook for policy that it instituted at the February meeting, the first of the year. The governor’s statement accompanying the decision closed with a repeat of the line in February’s decision that: “On present indications, the most prudent course is likely to be a period of stability in interest rates”. The remainder of the statement was also largely unchanged from the February meeting.

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