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Reserve Bank not convinced of global market recovery

Reserve Bank not convinced of global market recovery

The Reserve Bank of Australia (RBA) has decided that it is too early to be sure that the domestic and global economies are on the road to recovery.

The RBA board today decided to leave the cash rate – the interest rate paid by banks in the overnight money market – unchanged at 3% for the fifth straight meeting.

The board minutes show that the RBA has been receiving positive signs of recovery in the domestic and global markets.

The domestic market experienced growth in many areas of consumer spending, but these figures may have been skewed by the economic stimulus package, the board found.

Much of the international growth is coming from Asia, and Australia will be well-placed to reap these benefits as many of its primary export destinations are located in the region, the minutes show.

“Nonetheless, some uncertainty remained about the outlook both abroad and at home.” the document states. “The meeting concluded that the balance was best struck by leaving the cash rate unchanged for the time being, pending further evaluation.”

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