Reserve Bank of Australia keeps rates on hold, Aussie spikes to 0.7045

The Reserve Bank of Australia (RBA), at its May monetary policy meeting held this Tuesday, made no adjustment to its official cash rate (OCR) and maintained it at a record low of 1.50 percent for the thirtieth straight meeting, disappointing the hawks big time.

The RBA statement read: “The Board judged that it was appropriate to hold the stance of policy unchanged at this meeting. In doing so, it recognised that there was still spare capacity in the economy and that a further improvement in the labour market was likely to be needed for inflation to be consistent with the target. Given this assessment, the Board will be paying close attention to developments in the labour market at its upcoming meetings.”

With regard to the inflation level, the RBA added: “The inflation data for the March quarter were noticeably lower than expected and suggest subdued inflationary pressures across much of the economy. Over the year, inflation was 1.3 per cent and, in underlying terms, was 1.6 per cent.”

On the exchange rate value: “The Australian dollar is at the low end of its narrow range of recent times.”