RBA Repeats Rate-Cut Scope as Past Reductions Spur Demand

The Reserve Bank of Australia reiterated that the inflation outlook gives it room to reduce borrowing costs to a record even as earlier cuts boost demand.

“Interest-sensitive parts of the economy were responding to the historically low levels of lending rates and it remained likely that this had further to run,” minutes of the April 2 meeting released in Sydney today showed. “At the same time, the factors weighing on the economy -- including the high exchange rate, the waning growth of mining investment, and fiscal consolidation -- were likely to persist. The key issues were what the balance of these factors would turn out to be.”