RBA's governor: Inflation is low and should remain so

01.12.2015 / 06:08

Rating:

As expected, no change in the cash rate.

The global economy is expanding at a moderate pace, with some softening in conditions in the Asian region, continuing US growth and a recovery in Europe. Key commodity prices are much lower than a year ago, reflecting increased supply, including from Australia, as well as weaker demand. Australia's terms of trade are falling.

Inflation is low and should remain so, with the economy likely to have a degree of spare capacity for some time yet. Inflation is forecast to be consistent with the target over the next one to two years.

In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending.

The available information suggests that moderate expansion in the economy continues in the face of a large decline in capital spending.

Сtronger growth in employment and a steady rate of unemployment has been reported.

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RBA's governor: Inflation is low and should remain so

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