Unlike last month when a ‘surprise’ rate cut was announced, yesterday’s decision by the RBA to leave rates on hold hasn’t triggered an avalanche of media coverage. Its a nice bit of symmetry with the very brief accompanying statement (link here, the statement is only 383 words long).

The statement leaves the door open to further rate cuts (“the inflation outlook, as currently assessed, may provide some scope for further easing, should that be required to support demand”), though the declining Australian dollar is doing some of the work of a rate cut, giving a boost to foreign-exchange earnings. Many economists have forecast further declines for the AUD (if you place much faith in longer-term forecasts), which may reduce further the potential for more RBA cuts soon. An appreciating AUD would, however, get the RBA into cutting mode again. Its even possible that a stabilization the exchange rate around current levels would bring forward cuts.