The Reserve Bank of Australia still sees scope to ease monetary policy despite the release of June quarter inflation data, Governor Glenn Stevens said Tuesday.
"We have been saying recently that the inflation outlook may afford some scope to ease policy further if needed to support demand. The recent inflation data do not appear to have shifted that assessment," he said during a speech in Sydney.
Australia's annual inflation rate was 2.4 percent in the June quarter, well within the RBA's 2-3 percent target. Stevens said that the conduct of monetary policy must take account of the various features of the environment faced by the economy.
The recent decline in the exchange rate seems to make sense from a macroeconomic perspective, he said. "It would not be a major surprise if a further decline occurred over time, though of course events elsewhere in the world will also have a bearing on that particular price."
Stevens also noted that the boom period of resource sector investment has ended. "That big rise is now over, and a fall is in prospect, with uncertain timing. It could be quite a big fall in due course," he noted.
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