Tuesday, May 3, 2011

Reading Between the Lines of Reserve Bank of Australia's Rate Announcement

The Reserve Bank of Australia gave the market no surprises today when it held the cash rate unchanged at 4.75%, offering no respite for those lamenting the strong Australian dollar. But there were a number of assumptions in the accompanying media release that might be considered bold at best. It is fitting, then, that in this release the Bank added another sentence to the final paragraph: "In future meetings, the Board will continue to assess carefully the evolving outlook for growth and inflation." But more on that later.


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