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Australia’s central bank keeps policy rate, says local currency’s strength to weigh on growth

The Reserve Bank of Australia kept its benchmark rate unchanged on Tuesday in a widely expected move.

The country’s cash rate has stayed at 1.5 per cent since August 2016.

On the Australian dollar, the RBA said the recent strength “is expected to contribute to subdued price pressures in the economy.”

“It is also weighing on the outlook for output and employment. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast,” RBA governor Philip Lowe said in the central bank’s latest statement.

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