Saturday 27 June 2009

RBA Cash Rate unchanged at 3.00% (Jakarta) - The following statement is from the Reserve Bank of Australia Governor Glenn Stevens :
At its meeting today, the Board decided to leave the cash rate unchanged at 3.0%. Evidence has continued to emerge that the global economy is stabilizing, after a sharp contraction during the December and March quarters.

Prospects are being helped by better conditions in global financial markets. Confidence, while improving, nonetheless remains fragile and balance sheets are under pressure from the effects of economic weakness on asset quality. Credit remains tight. Continued progress in restoring balance sheets is essential for a durable recovery.

The Australian economy has been contracting. Capacity utilization has fallen back to about average levels, and will decline further over the rest of the year. With demand for labor weakening, growth in labor costs is beginning to fall. These conditions are likely to see inflation continue to abate over the next two years.