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RBA holds cash rate at 1.5% after May meeting

RBA holds cash rate at 1.5% after May meeting

The official cash rate remains steady at 1.5% after the latest Reserve Bank of Australia Board meeting.

At its meeting today, the Board of the Reserve Bank of Australia (RBA) decided to leave the cash rate unchanged at 1.5%.

Australian dollar

The Australian dollar was trading around 75.44 US cents after the RBA made its cash rate announcement at 2:30 p.m. (Sydney/Melbourne time), compared with 75.33 US cents earlier in the day.

An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast, the RBA has said.

Australia's economy

The Australian economy grew by 2.4% over 2017 and the RBA's central forecast for the Australian economy remains for growth to pick up, to average a bit above 3% in 2018 and 2019, this month’s statement said.

Rates steady since August 2016

The last time the cash rate changed was the 0.25 percentage points cut to 1.5% in August 2016.

Before the announcement today, there was a 0% expectation of an increase to 1.75%, according to the RBA Rate Indicator on the Australian Securities Exchange (ASX) website.

The indicator calculates a percentage probability of an RBA interest rate change based on the market determined prices in the ASX 30 Day Interbank Cash Rate Futures.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.