RBA implied cash rate to bullish

                  

             Reserve Bank of Australia (RBA) publishes its transcriptions on March 19. The Central Bank left the door open to more interest rate cuts, to spur their Nation’s economy. Several times, the RBA has responded to its development by lowering the cash rate. But this time it goes with the previous rate cut of 3.0 percent.

            The replica of the lowering the cash rate has not been with the intention of achieving a lower exchange rate rather than with the intention of compensating, some of the negative growth effects on the Australian economy leads to the high value of the AUD.

            RBA deputy governor says that the high dollar and increased household savings for the last decade made some troubles to the businesses; even they had been good for the global economy of Australia. Likewise, in order to keep inflation under control and economic growth at a sustainable level, they would have been reduced the interest rate.

                

                 RBA members noted that the government bond yields in major markets declined over February (i.e.) Japan and U.K fell in their bond yields. And they observed that the Australian share market maintains its persistence. So, there’s no need for the RBA to alter its interest rate.

               

                Obviously, Members noted that, the current pricing policy implied that the market expects only a small change of the cash rate being lowered at March meeting. After six rate cuts since 2011, economy continued to show signs of responding to these low rates and monetary level enriches.

                Last month, RBA lowered its economic growth. They preferred to increase the value of dollars which helps to keep inflations under control and their economic growth at a sustainable level. 

              This further realized the RBA board significantly facing higher inflations leads to substantially higher interest rates. Monetary policy played an imperative role in this adjustment by keeping inflation low and stable

                 Thus, the RBA is committed to continuing to play that role, (i.e.) cash rate unchanged at 3.0 percent. The timing of the next rate cut will be based on the economic outlook going forward. So AUD continuous bullish.