Wednesday 8 November 2017

The Australian Bank kept interest rates, sent the Australian dollar down

The Australian Central Bank kept interest rates at a record low for the 14th time.
However, this may soon change, given the central bank's forecast for a 3% growth over the next few years and a fall in unemployment from its current levels at 5.5%.
Far more cautious, however, was the tone of the central bank in terms of consumption and inflation.
For the last time, the Australian bank lowered interest rates in August 2016 in order to protect itself against the risk of deflation. The Bank is still facing serious difficulties in returning consumer price growth back to levels of 2-3%.
Inflation rose to only 1.8% in the third quarter of the year, but even this looks pretty high in the short term.
According to the Australian Bureau of Statistics (ABS), built-in inflation is actually about 1.6%.
The futures market does not expect an increase in interest rates in Australia until early 2019. All of this reflects extremely negatively on the Australian dollar, which dropped to 0.7636 against the US or its lowest value since the beginning of July.


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