Australia's
central bank held its cash rate steady on Tuesday to confound calls for a
cut and sending the local dollar sharply higher, though it did leave
the door wide open for an easing at future policy meetings.
The currency AUD=D4
jumped half a U.S. cent after the Reserve Bank of Australia (RBA) said
it was too early to follow February's quarter point cut to a record low
of 2.25 percent.
"The Board judged that, having eased monetary policy at the previous meeting, it was appropriate to hold interest rates steady for the time being," RBA Governor Glenn Stevens said after the bank's monthly policy meeting.
"Further easing of policy may be appropriate over the period ahead. The Board will further assess the case for such action at forthcoming meetings."
The explicit easing bias was likely intended to limit upward pressure on the Australian dollar, given how many other central banks have joined the global rush to the bottom on rates.
China trimmed its rates over the weekend and the European Central Bank starts a trillion-euro quantitative easing plan this month.
Investors are still pricing in at least one more cut by the RBA, though the implied probability of a move in April shrank to around 60 percent, from near 100 percent previously.
Many argued the stimulus was needed to revive an economy that has been running below trend for more than two years, pushing up unemployment and dragging down inflation.
Particularly worrying was recent data showing mining investment in full retreat after a decade of madcap expansion, while other sectors seemed unprepared to fill the gap.
 |
| RBA Governor Glenn Stevens. |
"The Board judged that, having eased monetary policy at the previous meeting, it was appropriate to hold interest rates steady for the time being," RBA Governor Glenn Stevens said after the bank's monthly policy meeting.
"Further easing of policy may be appropriate over the period ahead. The Board will further assess the case for such action at forthcoming meetings."
The explicit easing bias was likely intended to limit upward pressure on the Australian dollar, given how many other central banks have joined the global rush to the bottom on rates.
China trimmed its rates over the weekend and the European Central Bank starts a trillion-euro quantitative easing plan this month.
Investors are still pricing in at least one more cut by the RBA, though the implied probability of a move in April shrank to around 60 percent, from near 100 percent previously.
Many argued the stimulus was needed to revive an economy that has been running below trend for more than two years, pushing up unemployment and dragging down inflation.
Particularly worrying was recent data showing mining investment in full retreat after a decade of madcap expansion, while other sectors seemed unprepared to fill the gap.
No comments:
Post a Comment