RBA leaves cash rate on hold at 2% for March

“If it was driven entirely by commodity prices, it certainly should be lower”, Edwards told the Wall Street Journal in late February.

“Financial markets have once again exhibited heightened volatility over recent months, as participants grapple with uncertainty about the global economic outlook and policy settings among the major jurisdictions”, Stevens said.

On the worldwide outlook, the Reserve Bank reiterated its mixed forecast with China’s growth rate moderating while other advanced economies have posted a more healthy performance over the past year.

Dwelling approvals decreased in January in the ACT (11.3 per cent), Northern Territory (9.5 per cent), NSW (3.5 per cent), Western Australia (1.8 per cent) and Tasmania (1.7 per cent), but increased in Victoria (1.3 per cent), South Australia (0.3 per cent) and Queensland (0.1 per cent) in trend terms.

“Appetite for risk has diminished somewhat and funding conditions for emerging market sovereigns and lesser-rated corporates have tightened”. “The pace of lending to businesses also picked up”.

Mr Stevens said inflation was quite low, and would remain that way for at least another year or two, while labour costs also “quite subdued”.

“Confidence rebounded in February, so consumers are not panicking, and households will continue to spend, albeit with modest growth”, said Mr Robinson.

Reserve Bank of Australia (RBA) governor Glenn Stevens, in a statement largely unchanged from the February 2 policy meeting, said there was reasonable prospects for growth in Australia’s economy, even if inflation is low but “close to target”.

Many commentators anticipated the Reserve Bank would maintain its observational stance, waiting for a significant change in local or worldwide economic conditions before opting to move rates and maintaining future leverage in the process. Although the board did leave the door wide open for further easing in monetary policy in the future, it seems the board’s consensus is that there simply isn’t enough reason to change policy as yet. The central bank had expressed its easing bias in its recent statements saying persistent low inflation may give scope for easier policy, if that is suitable to help demand.

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