Australia's easing cycle may have ended already: BBVA

RBA keeps policy rate at 3.25%.

Here's more from BBVA:

Today the Reserve Bank of Australia kept its policy rate unchanged at 3.25% at its November’s monetary policy meeting, in line with our expectation but against the market’s consensus of a 25bps rate cut. The Australian dollar rose strongly after the surprise decision (by +0.6% to 1.042 against the USD).

RBA Governor Glenn Stevens said in a statement, “with prices data slightly higher than expected and recent information on the world economy slightly more positive, the Board judged that the stance of monetary policy was appropriate for the time being.”

Risks to the global economy, particularly in the US and China, seem more balanced recently in spite of downside risks posed by the European debt crisis, the RBA said.

On the other hand, the RBA estimates that Australia’s economy has grown close to trend before resources investment, Australia’s main growth driver, likely peaks in 2013.

On the monetary policy front, the RBA said that monetary policy has become more accommodative over the past year as borrowing costs remain low. Taken as a whole, we think that Australia’s easing cycle may have ended, especially if the global economy continues to improve.