| 05.03,19. 03:24 PM |
RBA holds interest rate steady for record 30th month
The Reserve Bank of Australia has continued its record-breaking streak of keeping the country's official interest cash rate unchanged for the 30th consecutive month.
The rate will remain at 1.5 per cent, where it has sat ever since it was shifted downward from 1.75 per cent in August 2016.
In a statement issued today, RBA governor Philip Lowe said the low rate continued to support the economy.
"Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual," he said.
"Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time."
Mr Lowe said while global growth had slowed in the latter half of 2018 and the start of 2019, the outlook remained "reasonable".
Domestically, he pointed to rising employment rates, with unemployment at five per cent and a further decrease to 4.75 per cent in the next couple of years.
"The stronger labour market has led to some pick-up in wages growth, which is a welcome development," he said.
"The improvement in the labour market should see some further lift in wages growth over time, although this is still expected to be a gradual process."
The Australian economy was expected to grow by three per cent this year, with rising household income expected to boost consumer spending.
Mr Lowe said inflation rates remained low and stable, and softness continued in the Melbourne and Sydney housing markets.
The decision to leave the interest rate steady followed Mr Lowe's speech to the National Press Club in early February, when he hinted at a future change in the interest rate.
"If Australians are finding jobs and their wages are rising more quickly, it is reasonable to expect that inflation will rise and that it will be appropriate to lift the cash rate at some point," he said.
"On the other hand, given the uncertainties, it is possible that the economy is softer than we expect, and that income and consumption growth disappoint.
"In the event of a sustained increase in the unemployment rate and a lack of further progress towards the inflation objective, lower interest rates might be appropriate at some point."
However, he admitted then that the RBA board did not see a "strong case" for a near-term change in the rate.