Statement by Glenn Stevens, Governor: Monetary Policy Decision - October 2013 | Media Releases | RBA
Central bank: rba | Type: statement | Date: 2013-10-01

Media Release
Statement by Glenn Stevens, Governor:
Monetary Policy Decision
1 October 2013
At its meeting today, the Board decided to leave the cash rate unchanged at
2.5 per cent.
Recent information is consistent with global growth running a bit below average
this year, with reasonable prospects of a pick-up next year. Commodity prices
have declined from their peaks, but generally remain at high levels by historical
standards. Inflation in most countries remains well contained.
Overall, global financial conditions remain very accommodative. Changes in
the outlook for US monetary policy have increased volatility in financial
markets, but long-term interest rates remain very low and there is ample
funding available for creditworthy borrowers.
In Australia, the economy has been growing a bit below trend over the past
year. This is expected to continue in the near term as the economy adjusts
to lower levels of mining investment. The unemployment rate has edged higher.
There has been an improvement in indicators of household and business sentiment
recently, though it is too soon to judge how persistent this will be. Inflation
has been consistent with the medium-term target. With growth in labour costs
moderating, this is expected to remain the case over the next one to two
years, even with the effects of the lower exchange rate.
The easing in monetary policy since late 2011 has supported interest-sensitive
spending and asset values. The full effects of these decisions are still
coming through, and will be for a while yet. The pace of borrowing has remained
relatively subdued to date, though recently there have been signs of increased
demand for finance by households. There is also continuing evidence of a
shift in savers' behaviour in response to declining returns on low-risk
The Australian dollar rose recently, but is still about 10 per cent below
its level in April. A lower level of the currency than seen at present would
assist in rebalancing growth in the economy.
At today's meeting, the Board judged that the setting of monetary policy
remained appropriate. The Board will continue to assess the outlook and adjust
policy as needed to foster sustainable growth in demand and inflation outcomes
consistent with the target.
Dr Christopher Kent
Assistant Governor (Economic)
Phone: +61 2 9551 8800
Dr Guy Debelle
Assistant Governor (Financial Markets)
Phone: +61 2 9551 8200
Media Office
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