RBA Observing Impact of Rate Cuts

Australia’s central bank said interest-rate reductions are affecting the nation’s economy, while retaining the option to loosen policy further to spur growth, minutes of the Oct. 1 meeting showed.

“The effect of low interest rates was evident across a range of indicators and had further to run,” the Reserve Bank of Australia said in the minutes released today in Sydney. “Members agreed that the bank should again neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them.”

The Australian dollar touched the highest level since June and investors pared bets on cuts as they interpreted the central bank shifting to a neutral bias. Governor Glenn Stevens and his board left rates at a record-low 2.5 percent this month after cutting by 2.25 percentage points since late 2011 to try to rebalance the economy as mining investment crests.

Bloomberg

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