HONG KONG (Dow Jones) -- The Reserve Bank of Australia cut its benchmark policy interest rate by a percentage point to 6.0% from 7.0%, citing disarray in global financial markets and mounting evidence of a sudden deceleration in economic growth among Australia's major trading partners in Asia.
"The Board judged that a material change to the balance of risks surrounding the outlook had occurred, requiring a significantly less restrictive stance of monetary policy," Reserve Bank Governor Glenn Stevens said in a statement Tuesday accompanying the rate decision.
Stevens said conditions in international financial markets had taken a significant turn for the worse in September, adding that obtaining financing is likely to be difficult around the world for some time to come in spite of efforts by central banks to unfreeze credit markets through liquidity injections.
"Economic activity in the major countries is also weakening, and evidence is accumulating of a significant moderation in growth in Australia's trading partners in Asia," Stevens said.
The governor also said consumer price inflation will likely accelerate to 5% on year in September but could begin easing in 2009.
"The recent deterioration in prospects for global growth, together with much more difficult market conditions even for creditworthy borrowers, now present the risk that demand and output could be significantly weaker than earlier expected. Should that occur, inflation would most likely fall faster than earlier forecast," Stevens said.
No comments:
Post a Comment