The Reserve Bank of Australia [RBA] in keeping rates on hold this week, with plenty in reserve to continue further easing of monetary policy if and when required.
Interest rate easing and effect lag
The effects of interest rate reductions can take several months to filter through to a measurable response in the economy of Australia, and this in fact has shown to to true in this cycle of rate reductions.Leaving Interest rates as is
The RBA Governor, Glenn Stevens, said "It was prudent to leave the cash rate unchanged, but, that there was scope to continue the easing cycle if it was necessary to support demand.House Building approvals and retail spending are up
Building approvals, consumer confidence and retail spending are improving and retailers have told the RBA that yet to be released spending figures for February would be encouraging.71,500 new jobs created in February
The RBA is taking the latest employment figures showing 71,500 new jobs were created in February into account.Whilst its too early too early to tell whether the job market has lifted, that has to be a good number for Australia's Labor Government as well as. Among the triggers that could make the bank cut rates again are a rise in unemployment as the resources investment boom slows, and a further rise in the Australian dollar.
