Statement by Glenn Stevens, Governor: Monetary Policy Decision - September 2015 | Media Releases | RBA
Central bank: rba | Type: statement | Date: 2015-09-01

Media Release
Statement by Glenn Stevens, Governor:
Monetary Policy Decision
1 September 2015
At its meeting today, the Board decided to leave the cash rate unchanged at
The global economy is expanding at a moderate pace, with some further softening in
conditions in China and east Asia of late, but stronger US growth. Key commodity
prices are much lower than a year ago, in part reflecting increased supply,
including from Australia. Australia's terms of trade are falling.
The Federal Reserve is expected to start increasing its policy rate over the period
ahead, but some other major central banks are continuing to ease policy.
Equity markets have been considerably more volatile of late, associated with
developments in China, though other financial markets have been relatively
stable. Long-term borrowing rates for most sovereigns and creditworthy private
borrowers remain remarkably low. Overall, global financial conditions remain
very accommodative.
In Australia, most of the available information suggests that moderate expansion
in the economy continues. While growth has been somewhat below longer-term
averages for some time, it has been accompanied with somewhat stronger growth
of employment and a steady rate of unemployment over the past year. Overall,
the economy is likely to be operating with a degree of spare capacity for
some time yet, with domestic inflationary pressures contained. Inflation
is thus forecast to remain consistent with the target over the next one to
two years, even with a lower exchange rate.
In such circumstances, monetary policy needs to be accommodative. Low interest rates
are acting to support borrowing and spending. Credit is recording moderate
growth overall, with growth in lending to the housing market broadly steady
over recent months. Dwelling prices continue to rise strongly in Sydney,
though trends have been more varied in a number of other cities. The Bank
is working with other regulators to assess and contain risks that may arise
from the housing market. In other asset markets, prices for commercial property
have been supported by lower long-term interest rates, while equity prices
have moved lower and been more volatile recently, in parallel with developments
in global markets. The Australian dollar is adjusting to the significant
declines in key commodity prices.
The Board today judged that leaving the cash rate unchanged was appropriate at this
meeting. Further information on economic and financial conditions to be received
over the period ahead will inform the Board's ongoing assessment of the
outlook and hence whether the current stance of policy will most effectively
foster sustainable growth and inflation consistent with the target.
Media Office
Information Department