RBA anticipates no more rate cuts

China expansion solid

The Reserve Bank of Australia signaled no more rate cuts will be forthcoming as it judged the current accommodative monetary policy is appropriate for now.

Looking down the road, the RBA said, "Movement towards a more normal setting of monetary policy could be expected at some point if further signs of a durable recovery emerge." In layman's terms, the bank is hinting at an eventual rate hike.

In its statement on monetary policy, the RBA said the global economy is stabilizing, while the pick-up in economic conditions is "most evident in China, where growth has been boosted by a large fiscal stimulus and increased bank lending."

There are fewer signs of recovery in the advanced economies, the RBA said, although the rate at which output is contracting has slowed noticeably. In the US, in particular, there is tentative evidence that the economy is reaching :a turning point," with the housing market showing signs of stabilization.

The key lending rate in Australia is currently at 3%.