The Reserve Bank of Australia kept its key interest rate at a record low to support growth and said an overvalued currency is hampering the economy’s transition away from mining investment.
The overnight cash rate target was held at 2.5 percent for a 13th month, Governor Glenn Stevens said in a statement today following an RBA board meeting in Adelaide. The decision was predicted by all 31 economists surveyed by Bloomberg News and markets had priced in almost no chance of a move.
The Australian dollar “remains above most estimates of its fundamental value, particularly given the declines in key commodity prices,” Stevens said. “It is offering less assistance than would normally be expected in achieving balanced growth in the economy.”