THE Reserve Bank of Australia has kept the cash rate at 2.5 per cent as it waits for recent rate reductions work their way through the economy.
The decision was expected, with all 14 economists surveyed by AAP last week forecasting no change at the September board meeting.
The RBA last cut the cash rate in August, by a quarter of a percentage point, and before that in May by the same amount.
In a statement accompanying the decision, RBA governor Glenn Stevens said growth was still below trend and would stay that way for a while as the economy moved away from one driven by the mining sector.
“Recent information is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next year,” he said.
“Commodity prices have declined from their peaks, but generally remain at high levels by historical standards. Inflation in most countries remains well contained.”
Mr Stevens noted that the Australian dollar was still high by historical levels despite falling 15 per cent since April, currently around 90 US cents.
The currency’s average level since it floated in December 1983 is 75.5 US cents.
“It is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy,” he said.
“The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target.”