Australia CB Leaves Rates Unchanged Currency Continues Drop

Even as the Reserve Bank of Australia (RBA) left its key interest rate steady at a record low on Tuesday, analysts bet the central bank would ease monetary policy soon to bolster the economy from an imminent peak in mining investment.

Australia’s central bank cut rates by 25 basis points just a month ago to 2.75 percent and markets had not anticipated another move so soon, especially since an almost 6 percent fall in the Aussie dollar over the past month has boosted exporters and given the economy a fillip.

The RBA said that there was scope for further monetary easing although policy was appropriate for now. In a sign that the recent fall in the Aussie dollar may not be a barrier to further cuts, the RBA said the currency remained high despite its recent depreciation.

via CNBC

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