RBA interest rate hold welcomed by retailers
Retail industry body the Australian Retailers Association (ARA) believes the Reserve Bank of Australia (RBA) has demonstrated good fiscal policy by leaving the official cash rate unchanged at three per cent today.
ARA Executive Director Richard Evans said today’s interest rate hold indicated the RBA was waiting to evaluate the effects of other economic stimuli yet to impact the market.
“With the Federal Budget announcement next week and while there are still a number of economic influences at play, the RBA is keeping its powder dry by not exhausting the ability to provide further rate cuts in the coming months,” he noted. “There is a lot of good news for the economy at the moment, including the Government stimulus package currently being rolled out, and other interest rate cuts from late last year and early this year typically taking three to six months to flow to the retail sector.”
“Retailers are working hard at the moment to stimulate consumer spend and ensure the Government’s stimulus funds, currently landing in bank accounts, are injected back into the economy,” Mr Evans said.
“Although March retail trade figures are out tomorrow early indications point towards an improvement on February’s low growth, but retailers aren’t expected to feel the full effects of the stimulus package until July.”
Food retailing has been one of the most resilient sectors in the economy over the past year with supermarkets posting record results, and growth in this sector is expected to continue to be climb. Restaurants, in contrast, have faced difficulties as discretionary spending has declined but there have been signs of recovery in recent ABS figures.