The Australian dollar rallied after the Reserve Bank of Australia refrained from changing its monetary policy during today’s meeting. The gains were not big as the central bank continued to complain about the strength of the currency.
The RBA left its main interest rate at 2.5 percent today. The bank maintained the outlook for a period of stability for monetary policy, saying in the statement:
In the Board’s judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates.
At the same time policy makers thought the depreciation of the currency was not big enough to overcome the slump of commodity prices:
The exchange rate has declined recently, in large part reflecting the strengthening US dollar, but remains high by historical standards, particularly given the further declines in key commodity prices in recent months. It is offering less assistance than would normally be expected in achieving balanced growth in the economy.
The RBA also talked about “moderate” growth both in global and domestic economies. The bank said that it expects that the current accommodative policy will continue to support economic growth.
AUD/USD rose from 0.8763 to 0.8789 as of 11:19 GMT today. EUR/AUD dropped from 1.4439 to 1.4334. AUD/JPY ticked up from 95.32 to 95.41.
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