Statement by Glenn Stevens, Governor: Monetary Policy Decision - August 2013 | Media Releases | RBA
Central bank: rba | Type: statement | Date: 2013-08-06

Media Release
Statement by Glenn Stevens, Governor:
Monetary Policy Decision
6 August 2013
At its meeting today, the Board decided to lower the cash rate by 25 basis
2.5 per cent,
effective 7 August 2013.
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 but, overall, remain at high levels by historical standards.
Inflation has moderated over recent months in a number of countries.
Globally, 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.
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.
Recent data confirm that 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 over the past 18 months has supported interest-sensitive
spending and asset values, and further effects can be expected over time.
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.
The Board has previously noted that the inflation outlook could provide some
scope to ease policy further, should that be required to support demand.
At today's meeting, and taking account of recent information on prices
and activity, the Board judged that a further decline in the cash rate was
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 inflation target over time.
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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