Rates on hold with no key economic news- Shadow RBA »

Australia had no need to change interest rates in April with an absence of major economic news at home and abroad leading to an almost boring consensus on monetary policy, the ANU RBA Shadow Board has found. The Board of the Reserve Bank of Australia (RBA) lowered the official cash rate from 2.25 per cent to 2.0 per cent in May 2015 and will meet on Tuesday to review interest-rate settings. RBA Shadow Board chair Dr Timo Henckel said global markets have rebounded from the turmoil at the start of the year and volatility has declined noticeably, with the RBA Shadow Board strongly in favour of keeping rates on hold. "Former Bank of England Governor Sir Mervyn King famously wrote that 'a successful central bank should be boring'. The recent consensus in monetary policy, given the absence of major news about the Australian and overseas economies to inform policy makers, appears to be just that," Dr Henckel said. He said the unemployment rate has fallen to 5.8 per cent and inflation at 1.7 per cent remains well below the RBA target band of two to three per cent. Economic growth came in at an annual 3.0 per cent at the end of 2015, fuelled by stronger household spending and government expenditure, while investment declined by 0.6 per cent in the fourth quarter, subtracting from GDP growth.