RBA Leaves Cash Rate at 3.50%, Australia Building Approvals MoM Rise by 27.3% - 3.7.2012

The Reserve Bank of Australia decided early on Tuesday to hold its cash rate at 3.50 per cent. The RBA said that Monetary Policy is appropriate as the “international outlook is more subdued than few months ago” and that “inflation is expected to be consistent with the target and growth close to trend”. Furthermore, the Building Approvals rose more than projected indicating that the housing market in Australia is growing faster than expected and that could increase demand for other goods, supporting growth in the economy as a whole. The monthly number of permits granted to build houses surged by 27.3 per cent in May compared to a revised 7.6 per cent decrease in April according to the Australia Bureau of Statistics. Equally important, the Building Approvals on an annual basis rose by 9.3 per cent in May 2012 while in May 2011 there was decrease of 23 per cent.