Australia Holds Key Rate as Central Bank Sounds Caution on China

Bloomberg.com — Australia held its interest rate at a record low as the central bank delivered a more sobering take on the global economy.

Reserve Bank Governor Philip Lowe and his board kept the cash rate at 1.5 percent, where it has now been for two years, in Sydney on Tuesday. Lowe amended his language on China’s economy in his accompanying statement, saying growth “has slowed a little” instead of growing solidly. He noted authorities there easing policy while heeding risks in the financial sector.

“The RBA quite rightly sounded a little less upbeat on the global outlook,” said Paul Dales, chief economist for Australia at Capital Economics. It “suggested that interest rates won’t rise for a while yet. Our more cautious forecasts suggest that rates may not rise until late in 2019, if not sometime in 2020.”