Governor Glenn Stevens and his board kept the overnight cash-rate target at 2.75 percent, theReserve Bank of Australia said in a statement today in Brisbane, as predicted by 25 of 28 economists surveyed by Bloomberg News. The Aussie “remains at a high level” and may “depreciate further over time, which would help to foster a rebalancing of growth,” Stevens said.
A 12 percent decline in the Australian dollar last quarter has helped buoy manufacturing sentiment, easing pressure on the governor to cut rates again. Policy makers lowered borrowing costs by 2 percentage points since late 2011, seeking to shift growth toward employment-intensive industries such as construction as mining investment wanes.
“The RBA is in no hurry to move interest rates and will wait for the data to push them into action,” said Joshua Williamson, a senior economist at Citigroup Inc. in Sydney. “They’re not worried about inflation, despite the fall in the exchange rate, so if needed that will allow them to cut rates.”
The currency dropped, trading at 91.69 U.S. cents at 3:15 p.m. in Sydney, from 92.21 cents before the RBA’s statement. The nation’s three-year bond yield fell to 2.77 percent from 2.79 percent before the RBA’s decision.