The Reserve Bank has left the cash rate at a record low of 2% for the ninth straight month, and remains optimistic about the local economy, with inflation close to target.
RBA governor Glenn Stevens took note of solid domestic economic momentum despite recent global financial market volatility.
“New information should allow the board to judge whether the recent improvement in labour market conditions is continuing and whether the recent financial turbulence portends weaker global and domestic demand,” he said in a statement after the RBA’s monthly board meeting on Tuesday.
The statement says that given the economic conditions, including the expansion in the non-mining parts of the economy, a contraction in the mining sector, the moderation of China’s growth rate and the decline in Australia’s terms of trade “it is appropriate for monetary policy to be accommodative”.
“Inflation continues to be quite low, with the CPI rising by 1.7% over 2015. This was partly caused by declining prices for oil and some utilities, but underlying measures of inflation are also low at about 2%,” the statement says.
The decision was in line with economists’ expectations.
