By Boris Schlossberg
The Reserve Bank of Australia kept rates on hold at 3.25% surprising the currency market which expected a rate cut of 25bp or more. The move came on the night when the country reported much better Retail Sales of 0.2% versus -0.5% expected as well as in improved Current Account number of -6.5 Billion versus forecast of -7.3 Billion deficit.
In commenting on their policy decision RBA Governor Glenn Stevens noted that, “There has already been a major change in both monetary and fiscal policy. The board will consider the position again at its next meeting.” The non committal statement suggests that the RBA board may remain stationary in April as well.
Australia’s economy has been relatively immune to the ongoing global economic crisis with employment last month actually increasing by 1.2K jobs versus projections of -18K loss. Governor Stevens referenced that point noting that Australia’s economy is holding up well and is not experiencing the severe downturns in the rest of industrialized world.
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