Interest Rates On Hold Again Ahead Of Christmas
RBA governor Glenn Stevens noted in his statement the RBA expects “growth to be a little below trend for the next several quarters”.
The unemployment rate is edging higher, while it will probably be some time yet before unemployment declines consistently, Stevens stated, with growth in wages expected to remain relatively modest over the period ahead, keeping inflation consistent within a 2-3 per cent target, even with lower levels of the exchange rate.
Stevens reiterated the RBA’s previous view that “the most prudent course is likely to be a period of stability in interest rates”.
In response to the decision, the Australian Retailers Association stated it will support the retail industry “to achieve $45 billion in pre-Christmas sales, representing a 4.3 per cent increase year-on-year”.
“While retailers didn’t receive their Christmas wish of an interest rate cut today, the industry remains optimistic that the festive trading period is well and truly underway,” commented ARA executive director Russell Zimmerman.
“With only three weeks until Santa arrives, foot traffic has increased in shopping precincts across Australia and retail tills are ringing.
“It seems the stable cash rate has encouraged consumers to let go of their purse strings a little earlier than usual this year, but in order for sales to continue building momentum as Christmas approaches (and for the retail industry to return to a growth of six per cent) the federal government and RBA must do all that they can to ensure that retail trade is fully supported as consumers start their holiday shopping.”
Australian National Retailers Association (ANRA) CEO Anna McPhee stated ANRA welcomes the RBA’s decision ahead of Christmas.
“The Christmas spending projections of $32.6 billion released by ANRA last week, today’s decision, and consumer confidence trending up will go well in delivering a slightly higher retail sales result than last year,” McPhee commented.