RBA keeps cash rate unchanged at 1.75% for July

The Reserve Bank of Australia has left the official cash rate unchanged at 1.75% for the month of July.

The cash was cut by 25 basis points in May, which was the first time the rate had been cut in the space of 12 months.

RBA governor Glenn Stevens said in a statement today that despite volatility in financial markets following the Brexit referendum in the UK, “most markets have continued to function effectively”.

“Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative,” said Stevens.

“Any effects of the referendum outcome on global economic activity remain to be seen and, outside the effects on the UK economy itself, may be hard to discern.”

Stevens said inflation is expected to remain at low levels, given “very subdued growth in labour costs and very low cost pressures elsewhere in the world”, and the Australian economy has been growing despite substantial falls in business investment.

“Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend,” he said.

“Labour market indicators have been more mixed of late, but are consistent with a modest pace of expansion in employment in the near term.”