MNI REVIEW: RBA Leaves Rates On Hold, Will Ease If Needed

By Lachlan Colquhoun

     SYDNEY (MNI) - The Reserve Bank of Australia left its key interest rates

unchanged at a record-low 0.75% Tuesday, and said it would continue to monitor

the transmission of existing policy settings through to the economy.

     The RBA has already cut rates three times in 2019 and the statement

published alongside the decision repeated the view that the economy had reached

a "gentle turning point" after a soft first half of the year.

     After the three cuts, the RBA said it was observing some positive signs in

the economy, and had elected to keep rates on hold because of "long and variable

lags in the transmission of monetary policy", with a strong focus on the labour

market.

     --EASE IF NEEDED

     The RBA remains committed to its low rate policy, however, and says it is

prepared to ease monetary policy further "if needed" to support sustainable

growth in the economy.

     Progress towards targets on inflation and employment would be "gradual, the

Bank said, and any lift in wages growth would be a "welcome development".

     The Board statement noted that lower rates had transmitted through to a

lower exchange rate, which was supporting activity "across a range of

industries."

     There had also been an impact on reviving asset prices, particularly in the

housing market, and this was expected to lead to increased spending, including

on residential construction.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MMLRB$,M$A$$$,M$L$$$]