RBA keeps rates unchanged

The Reserve Bank of Australia (RBA) decided to leave the cash rate unchanged at 1.50 percent at its August monetary policy meeting. The move was widely expected by the markets.

In the statement accompanying the decision, the governor of the Australian regulator Philip Lowe noted that the regulator's forecasts for the domestic economy were largely changed. "Over the next couple of years, the central forecast is for the economy to grow at an annual rate of around 3 percent", he stated.

Mr. Lowe also said that the conditions in Australia's housing market vary considerably around the country, but noted that situation with briskly rising housing prices is "starting to ease."

Regarding the situation with inflation, he said that recent inflation data were broadly in-line with the RBA's expectations and reiterated his forecast the inflation pressure to pick up gradually.

The statement again reminded that the Australian dollar appreciation is expected "to contribute to subdued price pressures in the economy" as well as to "to result in a slower pick-up in economic activity and inflation than currently forecast."