The Reserve Bank has chosen to leave interest rates as they are at its August meeting, despite increasing evidence of a significant slowdown in many measurements of economic activity. A statement by the bank's governor, Glenn Stevens, acknowledged that household spending has been subdued over recent months, while business activity has softened and labour market conditions have started to ease. However, the latest Consumer Price Index figures reported so far have done little to diminish the central bank's concerns about inflation, with improving terms of trade adding to national income and spending power. After considering both domestic and international conditions the RBA decided to leave the cash rate unchanged at 7.25 per cent, but indicated that the probability of reducing rates in the months ahead is increasing.
Attached Files:
RBA Statement - August 2008 (pdf format)
