RBA Confirms Expectations, Keeps Rates at 7.25%

Noting the recent slump in consumer and business sentiment as signs the economy is cooling, the RBA felt comfortable leaving the cash rate at 7.25% as expected. Changes to monetary policy typically take several months to be left in the broad economy. The most recent rate raise was announced on March 4th, so we are likely to see continued slowdown in Australian economic metrics as borrowing costs filter through. Governor Glenn Stevens also made note of the "quite fragile" state of global financial markets as further reason to remain on the sidelines. The result was widely expected after Stevens characterized the previous rate hike as "substantial" and failed to yield any significant volatility in AUDUSD or related pairs.

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