As expected, no move on interest rates from the Reserve Bank and none in the remainder of 2015 after the central bank kept the cash rate steady at 2.0% yesterday.
It is the fifth month in a row the RBA has left the cash rate on hold, with most economists expecting no change until the first half of next year at the earliest.
The move however upset local investors and the ASX fell more than 50 points from the 5520 level it reached at 11 am, to close at 5167 – a gain of just 0.3% on the day.
The RBA decision at 2.30pm helped push the market lower in afternoon trading.
“The board today judged that leaving the cash rate unchanged was appropriate at this meeting,” said the statement from Governor, Glenn Stevens ended yesterday.
"Further information on economic and financial conditions to be received over the period ahead will inform the board’s ongoing assessment of the outlook."
The board’s statement was almost exactly the same as its statement from September.
Most economists say there’s no rate cut likely this year and well into 2016. In fact, it would have to take a sharp slide in China’s economy to produce a rate cut.
Jobs growth, retail sales, car sales, house sales, residential building all remain solid or growing.
Inflation won’t be a problem for a while, real wage growth remains weak.
“In such circumstances, monetary policy needs to be accommodative,” Mr Stevens said in yesterday’s statement.
"Low interest rates are acting to support borrowing and spending. Credit is recording moderate growth overall, with growth in lending to the housing market broadly steady over recent months.
“Dwelling prices continue to rise strongly in Sydney and Melbourne, though trends have been more varied in a number of other cities.
"Regulatory measures are helping to contain risks that may arise from the housing market. In other asset markets, prices for commercial property have been supported by lower long-term interest rates, while equity prices have moved lower and been more volatile recently, in parallel with developments in global markets.
"The Australian dollar is adjusting to the significant declines in key commodity prices.
"The Board today judged that leaving the cash rate unchanged was appropriate at this meeting. Further information on economic and financial conditions to be received over the period ahead will inform the Board’s ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target,” yesterday’s statement ended.
