RBA Cash Rate Decision - Cash Rate cut by 0.25% to 1.25% - APAC Update

Xe Corporate APAC

June 4, 2019 3 min read

The Reserve Bank of Australia just announced the Cash Rate Target is cut by 0.25% to a record low of 1.25%. This was outcome was widely expected and is the first change in the Cash Rate since August 2016.

The pertinent points in the RBA’s accompanying statement were:

  • RBA’s cash rate target lowered by 0.25% to 1.25%

  • Needs faster progress in reducing unemployment

  • Took decision to support employment growth

  • Monitor developments in labour markets closely

  • Took decision to provide greater confidence on inflation

  • Outlook for global economy remains reasonable

  • To adjust policy to support sustainable growth

  • Downside risks from trade disputes have increased

  • Rate cut will help make further inroads into spare capacity

  • AUD$ at low end of narrow range of recent times

  • Central scenario for underlying inflation 1.75% in 2019, and 2% in 2020

  • Economy can sustain lower rate of unemployment

  • Central scenario for domestic economy to grow around 2.75% in 2019, 2020

  • Conditions remain soft in housing market

  • Main domestic uncertainty continues to be household consumption

  • Some pick-up in growth in household income expected, should support consumption

  • Little further inroads in spare capacity in labour market of late

The AUD**is a slightly higher in immediate response.**

Current indicative levels are:

AUD-USD        0.6975 / 0.7000
AUD-EUR         0.6195 / 0.6220
AUD-GBP        0.5505 / 0.5530
AUD-JPY            75.30 / 75.55
AUD-NZD        1.0590 / 1.0615

The next RBA Cash Rate policy meeting will be held on Tuesday 2nd July 2019.

Below is the link to the RBA’s media release:


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