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RBA ready to cut key interest rate
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The Reserve Bank of Australia does not exclude a possibility of the key interest rate cut at the meeting in May. According to the document, this issue was actively discussed during the previous meeting of members of the governing board. Most analysts had expected that the central bank would announce the monetary policy easing in April.
However, the regulator decided to take its time after the benchmark interest rate was lowered in February. At that time, the reading was reduced by 25 points to a new record low of 2.25%.
Yesterday in New York, Chair of the Reserve Bank Glenn Stevens said that softer policy would correspond to the current inflation risks. However, this decision may deteriorate the situation of increasing bubble in the Australian property market. Favorable credit conditions will trigger a rise in the investment demand for real estate, but home prices are already overpriced.
Following the speech of the Chair of the Reserve Bank of Australia, the Australian dollar declined to 0.7700.
The currency is likely to remain under pressure until the decision on the key interest rate is taken.

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