Cash rate in Australia to further stay at 3.25%

The Reserve Bank of Australia has announced it would keep its benchmark cash rate unchanged at 3.25%. It has explained its actions by saying that all necessary fiscal and monetary policies have already been introduced in Australia making its economy better than of other nations’. However, country’s central bank stated Australian economy still was under the risk. 

Glenn Stevens, Reserve Bank Gov., stated, the demand in the country “has not weakened as much as in other countries.” He continued his statement by highlighting low market and mortgage rates. However, he warned that Australia's weak economic conditions will continue to worsen in case global economic deterioration might continue. 

Glenn Maguire, SocGen Asia-Pacific economist, interpreted the bank’s actions the visible signs of stabilization in China, and intentions of its actions being viewed as a vote of confidence in the Australian economy. 

The Australian central bank has already raised interest rates twice and cut them five times in the last 13 months. 

The Australian dollar has jumped about half a U.S. cent and settled at US$0.6393 once the news on the rate was released. 

Japan's economy, which will directly affect the demand for Australian products, is expected to contract by double digits this quarter.