Interest rates remain steady over Christmas break

In its final meeting of the year the RBA has kept interest rates on hold.

The RBA released a statement that was identical to the previous month, stressing that the value of the Australian dollar was ‘still uncomfortably high’.

The Reserve Bank board won’t meet again now until February. 

The Australian dollar slipped a quarter of a cent on the news. 

RBA governor Glenn Stevens said the current rates were at an appropriate level. 

“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 target,” he said. 

Better retail figures for October are boosting assumptions that lower interest rates were supporting growth in non-mining industries. 

Retail sales rose above the predicted 0.4 per cent in October to a seasonally adjusted 0.5 per cent, with spending on food, clothing and restaurants particularly high. 

However Mr Stevens said it was still unclear how much impact improved consumer and business sentiment was having. 

The similar message coming from the RBA suggests they are not keen to rock the economic boat before the summer holidays, over which time the RBA will be keeping a close eye on the Australian dollar, capital expenditure, the housing and labour market and moves by the US Federal Reserve to reduce its bond-buying program.


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