Statement by Glenn Stevens, Governor: Monetary Policy Decision - September 2013 | Media Releases | RBA
Central bank: rba | Type: statement | Date: 2013-09-03

Media Release
Statement by Glenn Stevens, Governor:
Monetary Policy Decision
3 September 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, though the
recent reassessment by markets of the outlook for US monetary policy has
seen a noticeable rise in sovereign bond yields, from exceptionally low levels.
Volatility in financial markets has increased and has affected a number of
emerging market economies in particular. Notwithstanding the higher volatility,
Australian institutions have ample access to funding markets.
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.
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 recent depreciation of the
exchange rate.
The easing in monetary policy since late 2011 has supported interest-sensitive
spending and asset values, and further effects can be expected over time,
including from the declines in rates seen over recent months. The pace of
borrowing has remained relatively subdued, though recently there are signs
of increased demand for finance by households.
The Australian dollar has depreciated by around 15 per cent since
early April, although it remains at a high level. It is possible that the
exchange rate will depreciate further over time, which would help to foster
a rebalancing of 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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