Reserve Bank of Australia adopts neutral stance: Mecklai
Published on Tue, Feb 07, 2012 at 11:20 | Source : Moneycontrol.com
Updated at Tue, Feb 07, 2012 at 11:31
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Reserve Bank of Australia adopts neutral stance: Mecklai
Mecklai graph of the day - Reserve Bank of Australia (RBA) announced its monetary policy earlier today and (unexpectedly) decided to keep the cash rate unchanged at 4.25% as against the market expectation of 25 basis points cut to 4.00%.
Mecklai graph of the day - RBA adopts neutral stance
Reserve Bank of Australia (RBA) announced its monetary policy earlier today and (unexpectedly) decided to keep the cash rate unchanged at 4.25% as against the market expectation of 25 basis points cut to 4.00%.
The aggressive stance of RBA in raising the interest rates since 2009 had started to hurt the economy. Recent data releases like Retail Sales, Employment Change and building approvals have printed lower than market expectations signaling the impact of higher interest rate on the economy. The RBA's decision reflects its confidence that US and Chinese economies will withstand the European crisis as reflected with recent data releases of the respective economies.
A reversal stance may be adopted by the RBA later in the year if the economic data fails to be in line with the levels targeted by RBA.
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