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As expected, the RBA remained its current monetary policy unchanged at meeting on Wednesday. Interest rate remained unchanged at 2.0% for the ninth meeting. However, possibility of further rate cut if economic growth slows down in the nearest months did not disappear from rhetoric. At the moment economists shifted their expectations for this step to May 2016.
Main arguments in favour of further policy easing may be low commodity prices and low rate of Australian dollar. Possibility of shocking impact from global economy may not be excluded. There were concerns at the last G20 summit that global economy faced new risks.
Glenn Stevens reiterated in his covering speech that current low inflation rate gave the bank room for maneuver and rate cut if necessary.
However, economists warn if the RBA remains its monetary policy at the current rate without additional easing, rate of national currency will rise. This will also level of insignificant successes achieved during the reorientation of economy after 20-year boom in mining sector.
At the current moment paces of reorientation are quite moderate and there are not clear signs that rising activity in healthcare and education may level fall of activity in commodity sector.
Main factor that will define monetary policy of the RBA in future is situation in employment market. End of the last year is characterised by acceleration of employment growth. However, there are doubts that this tendency will remain after boom in housing construction is over.