The Reserve Bank met expectations in deciding to leave the official cash rate untouched yesterday, but has tipped that relief may be on its way next month.
In spite of data showing inflation tracking at 1.8%, its lowest level in more than two years, the Central Bank said the current monetary policy setting was appropriate. RBA governor Glenn Stevens reiterated the Bank's stance that it had scope to move if conditions weakened materially.
But the RBA board hinted that a move could come at its next meeting. In the bank's statement, Stevens said the Reserve would assess upcoming inflation data when it met in May.
"At its next meeting, the Board will have the opportunity to reassess the outlook for inflation, taking into account not only data on demand and output but also forthcoming information on prices," he said.
Stevens indicated that scope for a rate cut already existed, but said the Reserve would wait for next month's data before taking further steps to boost demand.
"The Board judged the pace of output growth to be somewhat lower than earlier estimated, but also thought it prudent to see forthcoming key data on prices to reassess its outlook for inflation, before considering a further step to ease monetary policy," he said.
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