The Reserve Bank of Australia (RBA), at its June monetary policy meeting held this Tuesday, reduced its official cash rate (OCR) by 0.25bps to a record low of 1.25 percent, the first rate cut after the thirtieth straight meeting with the status-quo.
The RBA statement read: “Today's decision to lower the cash rate will help make further inroads into the spare capacity in the economy. It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target. The Board will continue to monitor developments in the labor market closely and adjust monetary policy to support sustainable growth in the economy and the achievement of the inflation target over time.”
With regard to the inflation level, the RBA added: “The recent inflation outcomes have been lower than expected and suggest subdued inflationary pressures across much of the economy. Inflation is still however anticipated to pick up, and will be boosted in the June quarter by increases in petrol prices. The central scenario remains for underlying inflation to be 1¾ per cent this year, 2 per cent in 2020 and a little higher after that.”
On the exchange rate value: “The Australian dollar has depreciated a little over the past few months and is at the low end of its narrow range of recent times.”
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