RBA Cuts Interest Rates to Historic Low

Yesterday, the RBA cut interest rates to an historic low of 2.75%

                                                                                                                                                                                                                                                      Governor Glenn Stevens, in the RBA statement explaining the Reserve Bank’s thinking, seemed to be generally

RBA Cuts Interest Rates to 2.75%

RBA Cuts Interest Rates to 2.75%

 upbeat about the Australian economy but again was worried about the high Australian dollar.

As we commented on a previous interest rate cut, when you have the best economy in the world, it’s surprising that the experts are surprised by a strong currency.

Anyway, in the words of Mr Stevens

“The Board has previously noted that the inflation outlook would afford scope to ease further, should that be necessary to support demand. At today’s meeting the Board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target.”

No doubt Reserve Bank will be surprised again in 6 months’ time at the robustness of the Aussie. Maybe they can just copy and paste this from the current press release.

“The exchange rate, on the other hand, has been little changed at a historically high level . . . “

RBA Cuts Interest Rates Again

RBA Cuts Interest Rates to 3.50%

Following last months 0.50% cut the RBA today decided to cut rates by another 0.25%.

Explaining the decision to reduce the rate to 3.50% the RBA Governor Glenn Stevens commented that “recent indicators suggest further weakening in Europe and some further moderation in growth in China.”

In the Media Release Stevens also noted the decline in share markets.

Federal Treasure Wayne Swan welcomed the moved and called on Europe to be more pro-active, “We would like to see the same decisive action in Europe.”

 

In This Week’s Client Newsletter – May 4th, 2012

Government Co-Contributions Boost Super

Yes, the government will put extra money into your super!

 Feature article:

“Co-contributions Boost Super” – Yes, the government will put extra money into your super!

 Overseas:

Major stock markets have a good first quarter of 2012.

US economy grows in first quarter.

Spain back in recession.

 Australia:

Australian stocks at 9-month high.

Federal Budget week.

RBA cuts interest rates – exporters hoping for another cut in August?

 

Plus all the usual news roundups on the WA Housing Market, Fuel prices,
Celebrity Birthdays and Sports.

Pundits Pushing RBA To Cut Rates

Pundits Warning Australian Economy Needs RBA ActionAhead of the RBA’s meeting this week pundits are calling for the central bank to cut rates to help Australia’s two-track economy.

One of the most outspoken critics of the RBA’s fiscal policy is Tim Colebatch, economic editor of The Age. Writing in today’s Sydney Morning Herald, Colebatch argues

“Even a 0.5 percentage point cut – assuming the banks pass it on – would still leave rates too high.”

So, all eyes tomorrow on the Reserve Bank Board.

 

Read Tim Colebatch’s article here: