Created
: 2025.04.01
2025.04.01 17:50
The Reserve Bank of Australia left its cash rate unchanged at 4.1% this morning. In its statement, the RBA made it clear that its priority was to return inflation to the middle of its 2-3% target range and that there were still too many uncertainties about the economic outlook, both in Australia and globally, to cut rates again at this time, Commerzbank's FX analyst Volkmar Baur notes.
"On the domestic front, the RBA is particularly concerned that the labour market remains very tight and that persistently low unemployment and weak productivity could lead to wage growth that could reignite inflation. On the global front, the central bank is particularly concerned about a potential trade war, which could weaken the economy but still fuel inflation."
"More surprisingly, the central bank says that there is uncertainty about the time lag with which changes in monetary policy take effect. The statement itself is absolutely correct - but it can hardly refer to the interest rate hikes, because the majority of them took place more than two years ago. And the RBA only cut rates six weeks ago, and then only by 25 basis points. In the current global environment of high uncertainty, it will be probably be difficult to discern the impact of a single 25 basis point move at all, regardless of the time lag. It would have to cut rates by a larger amount."
"In the coming weeks, much will depend on the development of the labour market, which has shown some weakness recently. I continue to believe that both the economy and inflation will prove less robust than the RBA currently anticipates, and therefore expect a rate move at the next meeting in May."
Created
: 2025.04.01
Last updated
: 2025.04.01
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy