Australia's central bank Tuesday said further interest rate cuts were possible, but stood by its decision earlier this month to leave them on hold, citing recent improved data on the global economy.
The Reserve Bank of Australia (RBA) last cut its official cash rate by 25 basis points in October to 3.25 percent, a low not seen since late 2009 when it first resumed hiking them after the global financial crisis.
“Members considered that further easing may be appropriate in the period ahead,” the RBA said in the minutes of its November 6 meeting released Tuesday.
“However, with prices data for the September quarter slightly higher than expected and recent information on the world economy slightly more positive, the board judged that the stance of monetary policy was appropriate for the time being.”
The RBA has cut 100 basis points from the rate throughout 2012 and said these were still working their way through the economy.
On the global economy, the central bank said recent news was “somewhat more positive” than it had been.
The bank pointed to improvements in China after various stimulus measures, while the US was showing moderate growth, adding that a solution to the fiscal cliff of tax hikes and spending cuts “could result in better growth prospects”.
In Europe it said recent policy announcements had helped to bolster financial market conditions, though economic activity there remained weak.
Domestically, inflation in the September quarter was a little higher than expected, with the underlying figure about 2.5 percent over the year, while unemployment was up slightly in September at 5.4 percent.
“Overall, growth of the Australian economy had slowed from an above-trend pace earlier in the year, with recent indicators of activity suggesting that economic growth was more moderate in the September quarter,” it said.
Last month the government cut its real economic growth forecast - from 3.25 percent to 3.0 percent - as weaker global conditions hurt revenues in the mining-driven economy. - Sapa-AFP