RBA leaves rate unchanged, but amends policies

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

The Reserve Bank of Australia at its December meeting decided to leave the official cash rate unchanged at 6.75 per cent, but has announced three changes in policy that may reflect discussions between its governor and new Labor treasurer Wayne Swan.

The first two of the changes remove the veil of secrecy that the bank has previously been criticized for.

In the first, the bank has said that it will release comment on the reasons for its decision as it announces the decision.

The first such statement accompanied the December decision, and says that, while the board is concerned about inflation in the first half of 2008, it believes that a number of factors will help to contain private demand over the next couple of months.

Principally amongst those factors it identifies increased borrowing costs, both as a result of its own actions and market-driven increases in funding costs for intermediaries. It identifies this latter as likely to continue for at least the immediate future.

Second, the bank will now release the minutes of its monthly board monetary policy meetings, two weeks after the meeting. This brings it into line with central banks in just about very other developed economy.

And the third change is one of timing. Instead of announcing its rate decision at 9.30am the day after the meeting and it taking effect immediately, the decision will be announced at 2.30pm on the day of the meeting, and come into effect the following morning.

This change will take effect from the board’s February meeting (it does not normally meet in January).


This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7594 0.0000 0.00%
AUD 0.9719 0.0000 0.00%
EUR 0.6980 0.0000 0.00%
GBP 0.5015 0.0000 0.00%
HKD 5.8944 0.0000 0.00%
JPY 90.3750 0.0000 0.00%

Commods

Commodity Price Change Time
Gold Index 1179.0 -14.680 2015-04-24T00:
Oil Brent 65.3 1.460 2015-04-24T00:
Oil Nymex 57.1 -0.480 2015-04-24T00:
Silver Index 15.6 -0.190 2015-04-24T00:

Indices

Symbol Open High Last %
NZX 50 5757.9 5776.4 5757.9 0.13%
NASDAQ 5096.3 5100.4 5056.1 0.71%
DAX 11783.6 11881.0 11723.6 0.74%
DJI 18056.4 18108.9 18058.7 0.12%
FTSE 7053.7 7102.6 7053.7 0.24%
HKSE 27978.4 28089.4 27827.7 0.84%
NI225 20142.5 20142.5 20187.7 -0.83%