Reserve Bank of Australia Governor Glenn Stevens said his nation’s economy needs an injection of confidence rather than lower interest rates to stimulate growth, signaling policy will probably remain unchanged.
“I don’t really think interest rates are the answer just at the moment; that could change if something else happens,” Stevens told a parliamentary panel in Brisbane today. “We need this environment where there’s more confidence to move ahead. I cannot make that happen.”
The RBA has kept its cash rate target at a record-low 2.5 percent since August last year as it seeks to foster a transition from waning resource investment to other sources of demand. While housing construction is picking up, businesses are yet to embark on any significant expansion, leaving economic growth below its long-term average.