Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Interest Rates

News : Interest Rates
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 

RBA Leaves Rates on Hold; Watching Impact of Fires, Virus

share with twitter share with LinkedIn share with facebook
share via e-mail
02/03/2020 | 11:27pm EDT

By James Glynn

SYDNEY--The Reserve Bank of Australia left its benchmark interest rate on hold Tuesday, but it remains somewhat cautious on the outlook in 2020 with its eye on stubbornly weak consumer spending and growing global growth risks linked to the spread of the new coronavirus.

The official cash rate remained at a record low of 0.75%, with the RBA pointing to evidence that three interest rate cuts in 2019 are boosting house prices and underpinning household debt reduction.

"The Board will continue to monitor developments carefully, including in the labor market. It remains prepared to ease monetary policy further if needed to support sustainable growth in the economy," RBA Gov. Philip Lowe said in a statement accompanying the decision.

Unemployment has been nudging lower in recent months, giving the RBA some time to pause and consider its next policy decision, economists said. A question mark remains over the impact of bush fires and the coronavirus on the outlook.

"In the short term, the bushfires and the coronavirus outbreak will temporarily weigh on domestic growth," Mr. Lowe added.

Mr. Lowe expected unemployment to remain around its current level of 5.1% for now, before moving lower over the medium term.

Retail spending has also strengthened a bit, offering some hope that consumer demand might be recovering tentatively. Still, data later this week is expected to show soft Christmas sales.

"The easing of monetary policy last year is supporting employment and income growth in Australia and a return of inflation to the medium-term target range," Mr. Lowe said.

Interest-rate cuts last year have put downward pressure on the Australian dollar, offered consumers time to reduce mortgage and credit-card debt as well as boosted asset prices, he added.

The RBA is tallying up the impact of recent wildfires across much of the country, with the bank's 2020 growth forecast set to be shaved in an update on the economy on Friday.

Australia is in the direct firing line of the coronavirus fallout given its heavy reliance on Chinese tourism. Any buckling of the Chinese economy would put a hefty dent in iron-ore exports from Australia's northwest mining region.

Write to James Glynn at james.glynn@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) 0.15% 0.9164 Delayed Quote.0.55%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) 1.33% 71.471 Delayed Quote.-7.49%
AUSTRALIAN DOLLAR / NEW ZEALAND DOLLAR (AUD/NZD) 0.03% 1.07244 Delayed Quote.2.78%
AUSTRALIAN DOLLAR / SWISS FRANC (AUD/CHF) 0.88% 0.64175 Delayed Quote.-6.24%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 1.51% 0.6647 Delayed Quote.-6.70%
BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) -0.41% 1.85503 Delayed Quote.-1.52%
EURO / AUSTRALIAN DOLLAR (EUR/AUD) -0.77% 1.65147 Delayed Quote.4.31%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news "Interest Rates"
08:09aMacy's announces $1 billion bond offering to repay credit facility
06:13aBoE not remotely close to any decision on negative rates - Haldane
02:26aSouth Korea seen cutting rates this week as exports extend slump - Reuters poll
01:47aTencent plans to sell billions of dollars in bonds globally
05/24eSwatini cuts rates further in response to virus
05/22State Jobless Rates for April Show Uneven Impact of Pandemic -- 2nd Update
05/22Correction to State Jobless Rates Article
05/22Argentina defaults on bond payments as debt talks heat up
05/22Why bond investors are willing to bet on money-losing Pemex after oil price crash
05/22Britain in deepest downturn for centuries, scant chance of negative rates - Reuters poll
Latest news "Interest Rates"