RBA governor Glenn Stevens said Australia's economic growth has been robust and should be above trend in 2011, the low rate of inflation over past two years also expected to go up in coming years.
Obviously, the central forecast might be wrong. Something could come out internationally or nationally that affects the outcome. But if downside possbilities do no materialise, cash rate will be depended on monetary policy to manage the robust upswing. Mr Stevens also believes the growth will continue to escalate due to high export prices and "the largest minerals and energy boom since the 19th century".
RBA rapidly increased the vash rate from three per cent to 4.5 per cent, in six increments between last October to May. While, the inflation rate fell from 4.7 per cent in September quarter of 2008 to 2.7 per cent at June 2010.
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