Australia’s central bank remains cautiously optimistic about the outlook for the economy, but has left the door open to cut interest rates further if growth slows. In minutes of its November 3 policy meeting, when policy makers left interest rates unchanged at a record low 2 per cent, the Reserve Bank of Australia said “the inflation outlook may afford some scope for further easing of monetary policy, should that be appropriate to lend of support to demand.”
The minutes, published Tuesday, also made clear that the RBA sees recent evidence of ongoing improvement in the economy. “The prospects for an improvement in economic conditions had firmed a little over recent months,” it said.
Support was flowing to the economy from low interest rates and a weaker Australian dollar, which was bolstering services sector exports and assisting a shift away from mining-led growth to other areas of the economy. Australia’s economy has been sluggish in recent years, hit hard by falling commodity prices, a downturn in mining investment, and for a time an elevated currency. Interest rates were cut to a record low 2 per cent in May.
You can read the minutes here.