Australia’s central bank saw signs economic activity was rebalancing toward sectors outside of the struggling mining industry when it decided to keep interest rates steady at its October policy meeting. Minutes of the Reserve Bank of Australia’s (RBA) meeting showed board members believed economic growth had picked up in the third quarter after temporary factors caused a near stall in the previous quarter.
Rate cuts earlier in the year were still supporting consumer spending and home building, while a lower local dollar was increasingly driving service exports, the minutes showed. The labor market had also proved stronger than expected and forward indicators of hiring pointed to the unemployment rate holding steady or falling a little in the months ahead.
“Given these considerations, the Board judged it was appropriate to leave the cash rate unchanged at this meeting,” the minutes showed. Rates have been at a record low of 2 percent since the last easing in May. The RBA offered no guidance on the prospect of a further cut, though financial markets are wagering heavily it will choose to ease again by February of next year.