RBA ought to keep rates steady in February: Shadow RBA »

The RBA Shadow Board continues to recommend with confidence that the cash rate be held at its current level of 2.5 per cent The Reserve Bank of Australia (RBA) should keep interest rates on hold after its February board meeting, with a fall in global oil prices and a lower Australian dollar to help stimulate the domestic economy, The Australian National University (ANU) RBA Shadow Board has found. The RBA's official cash rate has been set at 2.5 per cent since August 2013. The RBA Board will hold its February policy meeting on Tuesday, with some market economists suggesting it might need to cut interest rates. But RBA Shadow Board chair Dr Timo Henckel said while Australia's economic outlook was uncertain, core inflation remained within the RBA's target band of two to three per cent. "The RBA Shadow Board continues to recommend with confidence that the cash rate be held at its current level of 2.5 per cent," said Dr Henckel, from the ANU Centre for Applied Macroeconomic Analysis (CAMA). "Core inflation, a measure of inflation that excludes volatile items such as energy and food, currently lies at 2.1 per cent - within the official inflation target band. It suggests that the drop in energy prices does not call for an immediate reduction in the cash rate.