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Reserve Bank of Australia leaves cash rate unchanged at 1.5 percent

Xinhua, November 1, 2016 Adjust font size:

The Reserve Bank of Australia (RBA) has left its record low cash rate of 1.5 percent unchanged in line with the expectations of most economists and the market.

The RBA decided to hold its present cash rate at its November board meeting held on Tuesday, as inflation and economic growth were on track to meet its target over time.

RBA governor Philip Lowe in statement said that after two cuts done in May and August this year, the present cash rate would be best to kept steady in order to achieve the central bank's output on economic growth and inflation target in due time.

"The Bank's forecasts for output growth and inflation are little changed from those of three months ago," Lowe said.

"Over the next year, the economy is forecast to grow at close to its potential rate, before gradually strengthening."

"Inflation is expected to pick up gradually over the next two years."

"Taking account of the available information, and having eased monetary policy at its May and August meetings, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time," he said.

There have been 12 rate cuts since November 2011 from 4.75 percent to 1.50 percent.

For this year alone, rates last fell in August, when RBA lower its cash rate target from 1.75 percent to a record low of 1.5 percent.

Westpac managing director and global head of economics and research Bill Evans said the RBA's decision to leave cash rates unchanged was consistent with its views for the remainder of this year and over the course of 2017.

"However, with inflation only likely to track along the bottom of the 2-3 percent target band next year there will be scope to ease further should growth, and the labour market in particular, profoundly disappoint," Evans said.

"That is not our forecast but we acknowledge that if rates are to move next year it will be down rather than up in 2017," he said. Enditem