Further Rate Cuts Might Be Required – Said RBA
After seeing a continuous decline in Australia’s economic outlook, RBA say that it might be required to make further interest rate cuts.
The central bank says, “It held fire in March to assess the impact of its February rate cut, when it dropped Australia’s cash rate to a record low 2.25 per cent”.
RBA said, “On the basis of the current forecasts for growth and inflation, members were of the view that a case to ease monetary policy further might emerge“.
According to the central bank, “December quarter economic growth figures had shown domestic demand remained weak with the economy tracking at a below-trend pace”
After the analysis of figures it has been found that business investment could fare even worse than the RBA had expected, these all signs pointing to a subdued jobs market and sluggish wage growth.
“The recent rate cut would provide further support to the economy and further easing over the period ahead may be appropriate to foster sustainable growth in demand,” said board members.
But as per the decision made by them, RBA is not likely to cut in March. This is done to collect further data on how the economy was tracking and to watch how borrowers and savers reacted to the very low interest rates.
The RBA once again said, “It would work with other regulators to assess and contain risks that may emerge in the housing market, noting strong house prices in Sydney and Melbourne and growth in dwelling investment in the December quarter”.
New Source: https://au.finance.yahoo.com/news/rba-says-more-rate-cuts-003338419.html