The Australian dollar took a tumble today after the latest minutes meeting from the RBA where governor Glen Stevens noted that further interest rate cuts may be needed to stimulate the economy.
At 4.39pm (AEDT) the Australian dollar was trading at 76.90c after trading as high as US78.21c in yesterday’s trade.
The RBA noted that it was keeping an eye on inflation and further monetary easing may be needed in order to bring inflation up to the bank’s target rate
"The board judged that it was appropriate to hold interest rates steady for the time being, while accepting that further easing of policy may be appropriate over the period ahead to foster sustainable growth in demand and inflation consistent with the target. The board would continue to assess the case for such action at forthcoming meetings," the minutes said.
Speaking at a function in New York Mr Stevens retreated this position by noting that a rate reduction has to be considered depending on the state of the economy.
"Interest rates should be quite accommodative and the question of whether they should be reduced further has to be on the table,"
One of the main reasons keeping the RBA back from cutting interest rates is the skyrocketing real estate prices, which MR Stevens sees as an ever growing problem,
“It is hard to escape the conclusion Sydney prices – up by a third since 2012 – look rather exuberant." He noted
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