What are the reasons behind today's rate decision?
 
At the meeting today the Board left the cash rate unchanged at 2.5%.
 
This was widely anticipated and largely reflects the "steady as she goes " approach from the Board. Taking the range of available indicators into consideration the economy appears to improving in terms of business and consumer confidence together with retail sales and manufacturing activity.
 
Overall the Bank chose to keep rates on hold, although as has been stated on a number of occasions the inflation picture provides scope for further adjustments.
 
What is the RBA's reading on the Australian economy?

The Bank has suggested that the economy is growing marginally below trend, however, a range of partial indicators suggest that past rate cuts and the lower currency are beginning to support the transition of the economy away from the resources sector towards the broader economy.
 
What effect have previous rate cuts had on the Australian economy? Do you think the RBA is concerned or happy with the effect cuts have had?

Generally the RBA would be very pleased with the progressive impact of past rate cuts and the lower dollar on the broader economy. There has been much recent commentary regarding a housing bubble etc, however, this needs to be viewed in the context of the whole market not just the Sydney and Melbourne markets. Equally it should be remembered that house prices were largely steady if not lower over the five years to mid 2012.
 
Is the RBA concerned about a housing bubble?
 
The statement from the RBA does not explicitly mention housing, however, they highlight that past cuts have supported asset values and the increase demand for finance from households.

Overall, it does not appear that the RBA is overall concerned about a housing bubble, rather they would describe the market market as consistent with usual cyclical phases.
              
What is the RBA's reading on the global economy?
 
The Bank suggests that the outlook for 2014 is increasingly positive. Despite some recent unwelcome developments in the US and Italy , the broad outlook for the global economy is generally positive. This in turn will have positive flow on effects to the Australian economy.
 
Is the RBA concerned about the Australian dollar rising?
 
The RBA notes that despite the recent increase in the AUD , it is still about 10% below the level at the end of the first quarter of the year. Despite. This decrease the Bank would be comfortable to see the currency lower still.
 
What is ING Direct's outlook for interest rates and the Australian economy?

Generally we are very positive on the outlook for the economy. This is because of two factors, with the removal of electoral and political uncertainty, the underlying strength of the economy can come to the surface and secondly the considerable momentum that has already been provided to the economy is now allowed to shine through.
 
It appears increasingly likely the RBA has come to the end of the rate cutting cycle.