Melbourne Cup favourites deliver
For those taking a punt on Melbourne Cup Day, race favourite Fiorente and an interest rate hold seemed like sure bets and both delivered with the RBA announcing another cash rate hold.
Just like Fiorente was picked as the Melbourne Cup favourite, an interest rate hold was the sure pick of the financial industry and there were no surprises on the field or on the financial front this month.
The interest rate remains steady at 2.5 per cent and here’s some of what the RBA had to say:
The easing in monetary policy that has already occurred since late 2011 has supported interest-sensitive spending and asset values. The full effects of these decisions are still coming through, and will be for a while yet. The pace of borrowing has remained relatively subdued overall to date, though recently there have been signs of increased demand for finance by households. There is also continuing evidence of a shift in savers’ behaviour in response to declining returns on low-risk assets. Housing and equity markets have strengthened further, trends which should in time be supportive of investment.
The Australian dollar, while below its level earlier in the year, is still uncomfortably high. A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy.
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