The Australian Retailers Association (ARA), has expressed disappointment at the Reserve Bank’s (RBA) decision to leave the cash rate unchanged, on the back of increases by some major banks. The Reserve Bank has left the cash rate at a record low of two per cent for a sixth consecutive month.
“The ARA has been calling for a reduction in interest rates for some time, and we are disappointed that this has fallen on deaf ears,” Russell Zimmerman, executive director of the ARA, said.
“The ARA hopes that this does not lead to a restriction by consumers on Christmas purchases, which is the retail sector’s peak trading period. For Christmas spending to remain buoyant and top Christmas 2014’s figure of 42.5 billion, we need for consumer confidence to remain high,” said Zimmerman.
“An interest rate cut would have provided consumers with more discretionary dollars in their pockets and higher confidence, which generally leads to a greater willingness to spend.”
The Reserve Bank governor, Glenn Stevens, said while the prospects for an improvement in economic conditions had firmed, a rate cut could be on the cards down the track.
“The outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand,” he said in a statement after the RBA’s monthly board meeting on Tuesday.
September quarter figures out last week show that inflation for the year to September was 1.5 per cent, well below the RBA’s two to three per cent target band.
“With one more meeting of the RBA before the end of calendar 2015, the ARA will be hoping for a last minute interest rate reprieve in December,” said Zimmerman.