RBA Governor Speech on Monetary Policy - 8.6.2012

The Reserve Bank of Australia Governor Glenn Stevens at its speech earlier today explained the reasons of cutting the rates by 0.25 per cent. He said “The intended effect of recent policy actions is certainly not to pump up speculative demand for assets”. The latest data on Consumer Price Index for Australia have shown a 1.6% increase, staying in line with the RBA expectations that there is a relatively low risk of “re-igniting a boom in borrowing and prices”. The overnight cash rate is now at 3.50% and remains the highest compared to other developed economies. Lastly, the Australian Trade Balance deficit unexpectedly narrowed to -203 million in April from -1282 million in March, the Bureau of Statistics reported earlier today.