Australia’s central bank kept interest rates at a record low Tuesday in the first meeting for newly-minted chief Philip Lowe, amid solid domestic growth and signs that commodity prices have passed their trough.
Australian growth has remained robust despite the economy’s uneven transition away from mining-driven expansion, but a recent run of sluggish inflation figures drove the Reserve Bank of Australia to cut rates in May, and then again in August to 1.50 percent.
“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,” Lowe said in a statement after the monthly RBA board meeting.
The decision to sit on the sidelines was widely tipped by economists, and the Australian dollar drifted slightly lower to 76.67 US cents, from 76.76 US cents, after the statement was released.
It also reflected Lowe’s comments to a parliamentary hearing last month, where he struck a cautious note about further cuts to rates and added that the central bank was not “nutters” about keeping inflation in a tight range.
