Australia's central bank believes it will likely have to cut interest rates...
SYDNEY - Australia’s central bank believes it will likely have to cut interest rates further from the current record low of 1.25% in order to push down unemployment and revive growth in wages and inflation.
“Given the amount of spare capacity in the labor market and the economy more broadly, members agreed that it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead,” the minutes showed. So far, the newly re-elected government of Prime Minister Scott Morrison has downplayed the need for fiscal stimulus and stuck to plans for returning the budget to surplus in 2019/20.Tuesday’s minutes showed the Board judged lower rates would support the economy by pushing down the value of the Australian dollar. The currency has duly fallen to five-month lows since the RBA’s June 4 meeting.
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