PHOTO: Australian Cash Rate
Australia kept interest rates unchanged Tuesday as the labor and property markets’ strength gives the central bank room to wait and see how badly the economy will be hit by a slump in China’s growth.
Governor Philip Lowe kept the cash rate at 0.75% at the Reserve Bank’s first meeting of 2020, as predicted by most economists and traders. The jobless rate falling in the final two months of 2019 kept the RBA sidelined, despite the impending hit from wildfires and now the coronavirus.
The virus “is having a significant effect on the Chinese economy at present. It is too early to determine how long-lasting the impact will be,” Lowe said in a statement announcing the decision. “The board will continue to monitor developments carefully, including in the labor market. It remains prepared to ease monetary policy further if needed.”
The Australian dollar rose, trading at 67.22 U.S. cents at 3:41 p.m. in Sydney, from 66.86 before the decision.
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