After vindicating expectations of an interest rate cut on Tuesday, the Reserve Bank of Australia isn't showing much enthusiasm for another.

The door remains open but, in announcing the cash rate would be cut to a new half-century low of 2.5 per cent from 2.75 per cent, the central bank certainly didn't carry on about it.

"The board has previously noted that the inflation outlook could provide some scope to ease policy further, should that be required to support demand," the RBA said in the statement issued after its monthly board meeting.

But, in a conspicuous departure from the wording of previous announcements, it offered no comment about whether any of that scope would remain after the well-anticipated move.

Of course, such scope exists.

Inflation is the key.

"Recent data confirm that inflation has been consistent with the medium-term target.

"With growth in labour costs moderating, this is expected to remain the case over the next one to two years, even with the effects of the recent depreciation of the exchange rate," the RBA said.

If the economic outlook deteriorates, then that benign outlook for price rises would allow another growth-boosting reduction in the cash rate.

The exchange rate could have a bearing on the decision as well.

"The Australian dollar has depreciated by around 15 per cent since early April, although it remains at a high level.

"It is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy," the RBA said.

That implies that a further depreciation is factored into the RBA's central forecasts, meaning persistent strength in the Aussie dollar could be a catalyst for another cut.

But, because the RBA didn't say explicitly that there is scope for a rate cut, it's safe to assume that another is not seen as likely and that if the RBA does change its mind on this score it could be a while before that happens.


Publishing Services International Limited (PSIL) is the publisher and operator of a worldwide network of online news sites dedicated to delivering fair, accurate and relevant reporting from a variety of the world’s most trusted sources – from the biggest cities to the smallest towns.

We deliver positive and powerful messages to our readers, providing up‑to‑the‑second news that matters to the individual.

Our promise is to serve communities and individuals worldwide, delivering information that hasn’t always been available to them. We will give them back a voice – a voice that’s empowering because it is theirs – and provide a platform to communicate between themselves and the world.

We believe people are not just generic demographics; they are individuals with their own preferences and curiosities. We are about understanding these individuals, listening to them, and serving them.

We are the new pioneering spirit of news – we’re not talking to everyone, we’re talking with every one.

If you want your news, your voice, your way, on your time – we’ve got news for you.




If you have any questions or concerns please email us on


  • Australia, Toll Free 1-800-983-421
  • Hong Kong, Toll Free 800-906-187
  • Singapore, Toll Free 800-852-3871
  • USA/Canada, Toll Free 1-800-830-4132

Advertise With Us

Interested in being awesome?
Contact us by email or phone.