Statement by Glenn Stevens, Governor: Monetary Policy Decision - November 2015 | Media Releases | RBA
Central bank: rba | Type: statement | Date: 2015-11-03

Media Release
Statement by Glenn Stevens, Governor:
Monetary Policy Decision
3 November 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 the Asian region, continuing US growth and a recovery in Europe.
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 monetary
policy. Volatility in financial markets has abated somewhat for the moment.
While credit costs for some emerging market countries remain higher than
a year ago, global financial conditions overall remain very accommodative.
In Australia, the available information suggests that moderate expansion in the economy
continues. While GDP growth has been somewhat below longer-term averages
for some time, business surveys suggest a gradual improvement in conditions
over the past year. This has been accompanied by somewhat stronger growth
in employment and a steady rate of unemployment.
Inflation is low and should remain so, with the economy likely to have a degree of
spare capacity for some time yet. Inflation is forecast to be consistent
with the target over the next one to two years, but a little lower than earlier
In such circumstances, monetary policy needs to be accommodative. Low interest rates
are acting to support borrowing and spending. While the recent changes to
some lending rates for housing will reduce this support slightly, overall
conditions are still quite accommodative. Credit growth has increased a little
over recent months, with growth in lending to investors in the housing market
easing slightly while that for owner-occupiers appears to be picking up.
Dwelling prices continue to rise in Melbourne and Sydney, though the pace
of growth has moderated of late. Growth in dwelling prices has remained mostly
subdued in other cities. Supervisory measures are helping to 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 in parallel with
developments in global markets. The Australian dollar is adjusting to the
significant declines in key commodity prices.
At today's meeting the Board judged that the prospects for an improvement in
economic conditions had firmed a little over recent months and that leaving
the cash rate unchanged was appropriate at this meeting. Members also observed
that the outlook for inflation may afford scope for further easing of policy,
should that be appropriate to lend support to demand. The Board will continue
to assess 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