RBA cut its cash rate to 4.25%
07 December 2011
The RBA has cut the Cash Rate by 0.25% to 4.25%. This was widely expected by the financial markets.
The pertinent points in the RBA’s accompanying statement were:
• Says global growth moderating
• Saw scope for modest cut in Cash Rate
• Says Chinese growth slowing
• Europe hurting Asian trade
• Funding conditions for banks more difficult
• Inflation likely to be consistent with target in 2012 & 2013
• Economic growth to be around trend
• Sees further slowing in global growth
• Terms of trade to decline a little but remain high
• Commodity prices have declined further
• Lower commodity prices taking pressure off CPI
• Higher AUD has had noticeable dampening effect on household behaviour
The AUD moved lower/higher in immediate response.