Despite wide expectations that there would be a further cut to the Official Cash Rate, the Reserve Bank has surprised commentators with their decision to hold it at 1 percent for now.
Following the radical 0.5 percent cut in August, and no change in September, it was widely expected that there would be a reduction of 0.25 basis points in yesterday's announcement.
The Monetary Policy Committee agreed that economic developments since their August decision were having the desired stimulatory effect and did not warrant a further change at this stage.
Yesterday's statement said that the Committee had debated the positive and negative effects of keeping the OCR at 1.0 percent versus reducing it to 0.75. It said they agreed that both actions would be generally in line with the current OCR projection and that the reductions made this year were "transmitting through the economy" but it would take time for the full effect to be apparent.
The consensus was to keep the OCR at 1.0 percent, but the Committee noted the economic risks were still pointing to the downside in the near term and they would consider a further reduction in the future if warranted.
The next OCR announcement will be in February 2020.
You can read the full Monetary Policy Statement for November at the Reserve Bank website.