Apr 2009 RBA Rate Decision:
| The Reserve Bank of Australia lowered the benchmark interest rate by 25bp to a 49-year low of 3.00% as the region faces its first recession since 1991, and went onto say that the extraordinary efforts taken on by policymakers will help to ‘provide significant support to domestic demand.’ Governor Glenn Stevens said that the $1T economy will contract this year, and stated that there was only room for a ‘modest adjustment’ in April after the growth rate unexpectedly fell 0.5% in the fourth quarter, which is the first contraction since 2000. Moreover, the central bank noted that demands for employment is ‘weakening,’ while ‘demand for credit is weak overall,’ and said that policymakers expect GDP ‘to fall in 2009’ as the downturn in the global economy intensifies. The comments suggests that the RBA may continue to ease policy further as growth prospects deteriorate, and may step up their efforts as trade conditions falter. |
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