Australia's RBA Stands Pat, Still Sees Currency As Too High

The Reserve Bank of Australia kept its benchmark cash rate unchanged at 2.5% Tuesday, and although the decision was widely expected, the language of the accompanying statement sent the Australian dollar mildly lower. The statement from RBA Gov. Glenn Stevens was little changed from the previous meeting, calling the currency overvalued, even in light of its recent retreat. "The exchange rate has declined recently, in large part reflecting the strengthening U.S. dollar, but remains high by historical standards, particularly given the further declines in key commodity prices in recent months," Stevens wrote. The Aussie dollar slipped to 87.38 U.S. cents, down from 87.57 cents just before the decision. At the time of the last RBA rate call, it bought about 93 U.S. cents. As for the policy outlook, Stevens said that "on present indications, the most prudent course is likely to be a period of stability in interest rates," a comment that has appeared in every RBA statement this year.