The Reserve Bank of Australia is keeping a watchful eye on the turbulent Chinese stockmarket and Greek debt crisis.

In May they cut Australia’s interest rate to an historic low of 2 per cent. In June and July they opted to keep the rate on hold. But ahead of their meeting in August the RBA directors remain nervously tight-lipped about what to do with the interest rate.

“Information to be received over the period ahead on economic and financial conditions would continue to inform the board’s assessment of the outlook,” said the RBA (somewhat redundantly) in a statement released to the press.

In other words, the assessment would impinge on “whether the current stance on policy remained appropriate to foster sustainable growth and inflation consistent with the target.”

Australia’s current economic growth is consistent with that of its partners – not something to be proud of, neither to be ashamed of.

But ongoing uncertainty about the volatility of the Chinese stockmarket and the fallout from the social and economic upheaval in Greece will impact on the Australian economy. It’s just a case of keeping a careful eye on the consequences and adapting to whatever may happen.

The RBA is ruling nothing out when it comes to interest rates.  Current low figures have done nothing to stimulate business investment, but only worsened an already overheated housing market. Mining and non-mining investment remain weak yet “non-mining business profits had increased over the past year and surveys suggested that business conditions had generally improved,” said the RBA.

Improved for whom?

Unemployment remains catastrophically high. Business profits appear to be coming from downsizing rather than production.

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