No need to change rates in August - Shadow RBA »

The uncertainties surrounding the Chinese economy pose the biggest immediate threat to Australia's export markets and thus to Australia's GDP. The Reserve Bank of Australia (RBA) should hold interest rates steady in August against a backdrop of easing concerns over a Greek debt default and a continued fall in China's stock market, the ANU RBA Shadow Board has found. The RBA lowered the official cash rate from 2.25 per cent to 2.0 per cent in May. The RBA Board will meet on Tuesday to review interest-rate settings. RBA Shadow Board chair Dr Timo Henckel said the RBA had little new domestic economic data to guide its August policy meeting. "While official inflation came in at 1.5 per cent for the June quarter, well below the RBA's target band of two to three per cent, the RBA Shadow Board on balance prefers to hold firm on interest rates," Dr Henckel said. "Overseas, debt default and Greek exit from the Euro have been averted at the eleventh hour, while the Chinese stock market experienced a major correction from its lofty heights.