At it's meeting today, the board of the Reserve Bank of Australia have announced a drop in the cash rate by 25 basis points to 1.00%, a new record low.
- This easing of monetary policy will support employment growth and provide greater confidence that inflation will be consistent with the medium-term target.
- Over the year to the March quarter, the Australian economy grew at a below-trend 1.8 per cent. Consumption growth has been subdued, weighed down by a protracted period of low income growth and declining housing prices.
- Global financial conditions remain accommodative. The persistent downside risks to the global economy combined with subdued inflation have led to expectations of easing of monetary policy by the major central banks.
- Conditions in most housing markets remain soft, although there are some tentative signs that prices are now stabilising in Sydney and Melbourne. Growth in housing credit has also stabilised recently.
- Today's decision to lower the cash rate will help make further inroads into the spare capacity in the economy. It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target.
To view the full statement of Philip Lowe, Governor of the Reserve Bank, please click here.
Published : 01 Jul 2019