“The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand.” RBA Governor Glen Stephens stated in March 5th’s RBA statement. (RBA)
Following this statement, it is made clear that he is referring to possibly further adjusting the Australian interest rate: “At today’s meeting, taking into account the flow of recent information and noting that there had been a substantial easing of policy as a result of previous decisions, the Board judged that it was prudent to leave the cash rate unchanged. The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target over time.”
Australian Interest Rates Rates remained unchanged at 3.00%. Remaining at this half century low of the AUD rate did not affect the Forex market much because there wasn’t significant deviation (difference from the expectation).
Australian Dollar (AUD) The Australian Dollar is slightly stronger today since the figures were released. The AUSUSD could be at a critical turning point. Breaking through the 1.02 area could signal a significant shift in this pair for at least the short term.
2.75 AUD Interest Rates
It is expected that the Reserve Bank of Australia (RBA) could lower their interest rate in the coming months to a detrimental 2.75. According to Reuters: “If the data does soften quite considerably over the coming months, the RBA will provide a more accommodative stance on policy and that’s something we expect the Board to do,” said an economist at JP Morgan.
“At this stage we have them lowering the cash rate by 25 basis points in May, taking it to a terminal 2.75 percent.” (Click here to see the whole article)
Will there be a 2.75 Australian Interest Rate? Please share your thoughts below.
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