RBA Holds Rate at 2.25%, Aussie Dollar Rises

Marcus Jacob
03 Mar, 2015
New York City

Reserve Bank of Australia held rate at 2.25% following a 25 basis point reduction at the last meeting and the Aussie dollar gained. Seasonally adjusted current account deficit declined 21% in the December quarter and value of building approvals in January jumped 29%.

[R]5:30 PM Sydney – Reserve Bank of Australia held rate at 2.25% following a 25 basis point reduction at the last meeting and the Aussie dollar gained. Seasonally adjusted current account deficit declined 21% in the December quarter and value of building approvals in January jumped 29%.[/R]

Market indexes in Sydney turned lower after RBA dashed hopes of many for another rate as commodities markets soften.

The central bank as widely expected maintained the cash rate at 2.25%, the Reserve Bank of Australia announced today.

Seasonally adjusted current account deficit in the December quarter plunged 21% to $9.59 billion, followed by upwardly revised $12.13 billion deficit in the third quarter, the Australian Bureau of Statistics said today.

The department added the surplus on goods and services soared 54% to $7.99 billion compared to $5.18 billion in the third-quarter.

In a separate report, the department said seasonally adjusted total number of building approvals in January climbed 7.9% to 19,282 following the 2.8% fall in December, the Australian Bureau of Statistics said today.

Compared to year ago month, approvals soared 9.1% compared to 8.8% jump in the previous month.

The seasonally adjusted estimate of the value of total building approved in January jumped 28.7% after declining 10.9% in the previous month and the value of residential building rose 11.2% following a fall of 5.1% in the previous month.

Australian dollar closed at 78.25 U.S. cents and in stock trading turnover climbed to 872 million shares worth $6 billion.

ASX 200 Index slipped 25 or 0.4% to 5,933.90 and broader All Ordinaries Index fell 23.40 to 5,902.90.

In commodities trading, gold declined US$12 to US$1,209 an ounce and light crude oil slid 17 cents to US$49.59 a barrel.

Brent crude increased 83 cents to close at US$60.37 a barrel.

Australian Stock Movers

Cokal Ltd surged 26.3% to 12 cents after the Indonesian-based Cakra Mineral Tbk offered proposal for about $70 million amid to acquire coal project in central Kalimantan.

Ozforex Group Ltd jumped 2.1% to $2.43 after the online payment service provider said it may move to other banking partners from the services provided by Westpac.

Suncorp Group Ltd slipped 1.9% to $13.75 after the insurance provider forecasted financial impact on cost of claims exceed the allowance set aside for Tropical Cyclone Marcia and associated flooding in central Queensland to be between $120 million and $150 million.

Telstra Corporation Limited fell 0.6% to $6.38 after the communications service provider extending its strategic collaboration with the U.S.-based Cisco Systems, Inc in providing cloud-based services.

Woolworths Limited increased 1.8% to $29.82 after the supermarket operator divested its 8.8% stake in New Zealand-listed retailer Warehouse Group to a private retailer for about NZ$87 million or $65 million.