Statement by Glenn Stevens, Governor: Monetary Policy Decision - September 2016 | Media Releases | RBA
Central bank: rba | Type: statement | Date: 2016-09-06

Media Release
Statement by Glenn Stevens, Governor:
Monetary Policy Decision
6 September 2016
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per
The global economy is continuing to grow, at a lower than average pace. Several advanced
economies have recorded improved conditions over the past year, but conditions have
become more difficult for a number of emerging market economies. Actions by Chinese
policymakers have been supporting growth, but the underlying pace of China's
growth appears to be moderating.
Commodity prices are above recent lows, but this follows very substantial declines over
the past couple of years. Australia's terms of trade remain much lower than they
had been in recent years.
Financial markets have continued to function effectively. Funding costs for high-quality
borrowers remain low and, globally, monetary policy remains remarkably accommodative.
In Australia, recent data suggest that overall growth is continuing, despite a very
large decline in business investment, helped by growth in other areas of domestic demand
and exports. Labour market indicators continue to be somewhat mixed, but suggest
continued expansion in employment in the near term.
Inflation remains quite low. Given very subdued growth in labour costs and very low cost
pressures elsewhere in the world, this is expected to remain the case for some time.
Low interest rates have been supporting domestic demand and the lower exchange rate
since 2013 is helping the traded sector. Financial institutions are in a position to
lend for worthwhile purposes. These factors are all assisting the economy to make the
necessary economic adjustments, though an appreciating exchange rate could complicate
Supervisory measures have strengthened lending standards in the housing market.
Separately, a number of lenders are also taking a more cautious attitude to lending in
certain segments. The best available information suggests that dwelling prices overall
have risen moderately over the past year and growth in lending for housing purposes has
slowed. Considerable supply of apartments is scheduled to come on stream over the next
couple of years, particularly in the eastern capital cities.
Taking account of the available information, and having eased monetary policy at its May
and August meetings, the Board judged that holding the stance of policy unchanged at
this meeting would be consistent with sustainable growth in the economy and achieving
the inflation target over time.