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Last Friday, the Reserve Bank decided to leave the official cash rate on hold at 2.75 percent – the lowest rate recorded in 53 years. The rate was previously cut in May by 25 percent bringing it to this record low, and the RBA meets again on the 6th of August.
The falling Australian dollar is stimulating activity and helping to re-stabilise the economy. The weaker Australian dollar combined with the improvement of the US economy provided the RBA with adequate reason to keep rates on hold this month.
The Reserve Bank warned last month that it would continue to take action to restore growth, and if the economy continues to lag, the RBA has vowed to cut rates further.
