SYDNEY (AFP) — Australia's central bank skipped its monthly interest rate meeting Tuesday as expected, despite the economic downturn, as a new survey revealed business confidence was stuck at record lows.
Although the Reserve Bank of Australia (RBA) does not usually convene in January, governor Glenn Stevens last month refused to rule out a mid-summer meeting on monetary policy if economic conditions demanded it.
But no board meeting was held Tuesday, fulfilling economists' expectations that the bank's drastic cuts since September, which have seen the official cash rate fall from 7.25 percent to 4.25 percent, will suffice until February.
Meanwhile, the Australian Chamber of Commerce and Industry (ACCI) said its investor confidence survey found that conditions continued to deteriorate over the last months of 2008 and that expectations for early 2009 were even worse.
The chamber said business conditions and sales were at their lowest levels since the survey began in 1998 while profitability had declined to its lowest level in seven years.
"Future expectations for these three measures are much lower, with (businesses') own sales and profitability projections falling into negative territory for the first time in the survey's 11-year history," it said.
The ACCI said the survey, which polled 1,090 businesses overs the three months to December 2008, suggested employment would also fall in the next six months.
The survey's index on business conditions fell from 57.3 in September to 53.5 in December -- its lowest level since the survey began -- while the sales index dropped from 54.9 to 51.4 and the profitability index from 49.3 to 48.2.
The ACCI, which last month had called for a January RBA meeting to cut rates to help businesses struggling amid the credit crunch, urged retail banks to pass on the central bank's reductions in full.
"Small businesses have not received the full official rate reduction and that's impeding economic expansion in Australia," the ACCI's director of industry policy and economics Greg Evans told reporters.
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