RBA Leaves Rates on Hold in April

The Reserve Bank of Australia (RBA) has announced it will hold the official cash rate at 2% in April.

This is the tenth consecutive month that the official cash rate has been left on hold, despite a persistently strong Australian Dollar (AUD) threatening a cash rate cut.

The AUD reached an eight month high of USD $0.77 early this week. The strength of the AUD is partly due to a global currency battle, where many central banks around the world are simultaneously trying to lower the value of their currencies relative to others, in order to attract more exports. This mitigates the ability of the RBA to devalue the currency in Australia through further cuts to the cash rate. Even though Australia’s cash rate is at a historically low level, it remains high relative to other countries such as in Japan, where rates are in negative territory.