The Reserve Bank of Australia (RBA) kept the cash rate unchanged at 4.75%. The RBA said: "Taking into account all the recent information, the path for inflation may now be more consistent with the 2–3 per cent target in 2012 and 2013, abstracting from the impact of the carbon pricing scheme. This assessment will be reviewed on receipt of further data on prices ahead of the Board's next meeting. An improved inflation outlook would increase the scope for monetary policy to provide some support to demand, should that prove necessary."
The Bank also held the cash rate unchanged at 4.75% during its previous meeting in September this year, the RBA last increased the interest rate by 25 basis points in November last year. Australia reported annual consumer price inflation of 3.6% in Q2 this year, up from 3.3% in Q1, and 2.7% in the December quarter of 2010, and just outside the Bank's inflation target of 2-3%.
The Australian economy expanded 1.2% in the June quarter, after contracting -0.9% during the March quarter due to the impact of natural disasters; placing year on year GDP growth at 1.1% in the June quarter, and 1.2% in the March quarter.
The RBA next meets on the 4th of November, and will release its October meeting minutes on the 18th of October. The Australian dollar (AUD) had weakened about 6% against the US dollar so far this year, after reaching parity and climbing as high as 1.10 this year; the AUDUSD exchange rate last traded around 0.95