Tuesday, June 21, 2011

European Debt Crisis Forces RBA to Keep Interest Rates Unchanged 

Today, the Reserve Bank of Australia has releases its minutes according the meeting that held on June 7, which showed that European debt crisis has forced Australian policy makers to leave the interest rates steady at 4.75%, signaling that the Bank will keep the rates unchanged until the year's ending.

The Reserve Bank of Australian released today its minutes that held on June, where the Bank saw that keeping rates unchanged steady at 4.75% it's a prudent decision amid the slowing global economy, while the Bank aims to support the economy to rebound.

At the meantime, Australian economy still gives some optimism signs as the exports of iron ore and coal to China and other Asian countries surged, providing clues the economic recovery will rebound in the upcoming period, adding speculations the Reserve Bank of Australia will boost the rates next quarter.

On the other hand, the Bank has noted that increasing currency is helping to contain inflation appreciation, whereas the Bank has increased its warning about the situation in Euro-Zone as the Greece debt crisis that threatens the global economy, while it increased volatility in Forex markets on Euro concerns. 

While the Bank aimed to encourage companies to increase their expansion that will help to hire more workers, because of the Bank targeted to decline the unemployment rates in the upcoming period, further the recent data showed that wages are doing a stable performance; this is a positive phase amid slowing the nation's economy.

As for the current position in Australia, the Australian economy is still suffering from the natural disaster that hit the nation in the first three months, supported to increase the negative results that work to hurt economic recovery in Australia. Today, the Australian job advertisements slumped in May to the slowest pace in almost two years as the employment growth rate retreated.

Yet, economic growth in Australian continues its forward track to achieve more of gains amid the crisis that facing the global economic such as the European debt crisis and Japanese quake that have negative results on the global economic recovery.

The Australian economy confirmed that the business investment sector has gained a great performance during the first quarter of the year, which is the third consecutive quarterly increase, affected by the improvements in mining sector.

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