Australia's central bank is holding fire on interest rates as it awaits a resolution to the divergence between strong hiring and decelerating economic growth.
The Reserve Bank said the labor market is "particularly important" to the outlook and reiterated there's considerable uncertainty over consumption, minutes of its March 5 policy meeting released in Sydney Tuesday showed. It said dwelling investment was expected to subtract from growth and the decline "could be sharper" than currently expected.
"Members agreed that there was not a strong case for a near-term adjustment in monetary policy," it said. "Rather, they assessed that it would be appropriate to hold the cash rate steady while new information became available that could help resolve the current tensions in the domestic economic data."
The RBA has shifted to a neutral policy stance as tumbling property prices weigh on household spending and damp growth. It's trying to reconcile that slowdown with strong job gains and falling unemployment, as well as liaison with firms that signal a healthy employment outlook. The RBA noted this discrepancy is visible in several other developed economies.
Source : Bloomberg