The Reserve Bank of Australia (RBA) defied expectations this week by holding its benchmark cash rate at 2.25%. A majority of traders and economists had believed the central bank would lower rates once again, following its quarter-point cut in February.

Although economists had expected the RBA to lower rates at some point this year, it was the cavalcade of easing measures initiated by its central bank peers that finally forced its hand in early February. Prior to that, the bank had been concerned that another rate cut would simply fuel a further expansion of the country’s housing bubble.

But even though the previous level of the bank’s cash rate was already at an all-time low, it was still significantly higher than the benchmark short-term rates among its central bank peers. The RBA has historically kept short-term rates relatively high to attract capital inflows in order to help offset the country’s tendency to run persistent trade deficits.

In fact, higher rates were a key factor in the Australian dollar’s strength until a more hawkish U.S. Federal Reserve caused the U.S. dollar to surge.

While the declining exchange rate has been agonizing for U.S. investors in Australian stocks, the RBA sees a lower aussie as absolutely necessary to bolster the country’s economy now that commodities have crashed.

With so many central banks shifting into easing mode, the RBA knew that it had to keep pace or else it would risk a jump in the exchange rate.

To get a sense of how attractive aussie-denominated debt is to global institutions, Bloomberg noted that when Australia’s 10-year note recently hit an all-time low, it still offered a 1.5 percentage point premium to the debt of the country’s triple-A rated peers.

The aussie currently trades just above USD.77, its lowest level since the Global Financial Crisis. And the RBA would like to see the exchange rate go even lower, to around USD0.75.

Indeed, central bank chief Glenn Stevens observed that while the aussie has fallen sharply against the U.S. dollar, it hasn’t declined by nearly as much when measured against a basket of currencies. As such, he said the Australian dollar remains above most estimates of its fundamental value.

Like its central bank peer in Canada, the RBA decided to leave interest rates unchanged from last month in order to give its recent rate cut time to work. It also gives the bank time to work together with other regulators to rein in speculation by real estate investors.

Nevertheless, traders are pricing in two more quarter-point cuts over the coming year, with a thin majority betting on another rate cut as soon as the RBA’s May meeting. In the statement accompanying the announcement of its rate decision, the RBA said further easing may be appropriate in the period ahead, so the bank has definitely shifted to a downward rate bias from its former neutral stance.

To be sure, the RBA is admittedly uncomfortable with the hand it’s been dealt. As RBA Deputy Governor Philip Lowe recently remarked, “Global developments have left us with a higher exchange rate and lower interest rates than would otherwise have been the case.”

And the bank has once again said there are limits to what its monetary policy can achieve. But the limits of monetary policy are hardly an Australian problem.

After all, even though it’s been six years since the Global Financial Crisis, interest rates across the developed world remain well below historical norms. And at least 20 central banks have initiated new easing measures since the beginning of the year.

Much of the world’s growth is dependent upon demand from the U.S. and China. But China’s economy is in slowdown mode, while policymakers are still wary of seeing whether the U.S. economy can stand on its own again in a rising-rate environment.

Portfolio Update

By Khoa Nguyen

APA Group (ASX: APA, OTC: APAJF) reported first-half fiscal 2015 statutory EBITDA (earnings before interest, taxation, depreciation and amortization) jumped 113%, to AUD850 million. Adjusted EBITDA from its continuing business was up 9%, to AUD401 million.

Statutory net profit after tax (NPAT) surged 287%, to AUD467 million, due to the positive impact of AUD356 million in after-tax profit from the sale of APA’s shares of Envestra. Adjusted NPAT fell 8%, to AUD111 million, mainly due to the exclusion of earnings and taxes from the final dividends received from Envestra.

Adjusted operating cash flow for the first six months rose 22%, to AUD263 million.

APA’s Board of Directors declared an interim dividend of AUD0.175 per security. The company’s payout ratio improved to 55.6% of its normalized operating cash flows for the period, compared to 67% last year.

APA Group Chairman Len Bleasel said, “A number of recent expansion and enhancement projects have contributed to strong organic growth in the half year, while the profit recorded on the sale of our Envestra shareholding is now available for investment in projects that meet APA’s strict criteria, including the Queensland Curtis Liquefied Natural Gas Pipeline (QCLNG) acquisition.”

APA spent AUD162 million—relatively flat with fiscal 2014—on growth capital expenditure, including expansions to its gas infrastructure in New South Wales, Victoria, Queensland and Western Australia.

The company noted that its gas infrastructure will see a dramatic boost once its agreement with BG Group to acquire the QCLNG Pipeline for USD5 billion closes in June.

APA continues to focus on strengthening its balance sheet. The company completed an AUD1.8 billion equity raising in January. And it secured a USD4.1 billion two-year bridge debt facility to fund its acquisition of the QCLNG Pipeline.

Management raised its normalized EBITDA guidance to a range of AUD775 million to AUD790 million, up from a prior guidance range of AUD740 million to AUD760 million.

The expected increase of AUD30 million to AUD35 million in EBITDA will be driven by a contribution of AUD10 million to AUD20 million from LNG ramp gas, which has been a strong performer so far this year. Ramp gas is gas produced during the LNG start-up process.

The company’s QCLNG Pipeline is expected to generate additional EBITDA of AUD41 million to AUD83 million, which has not been factored into the aforementioned figures.

APA’s fiscal-year 2015 distribution guidance remains at least AUD0.3625 per security.

APA Group is a buy under USD7 on the ASX using the symbol APA and on the US over-the-counter (OTC) market using the symbol APAJF.

Ramsay Health Care’s (ASX: RHC, OTC: RMSYF) first-half core NPAT (net profit after tax) rose 19.1%, to AUD204.4 million, while core earnings per share (EPS) rose 20.2%, to AUD0.976 per security.

Total group revenue jumped 41.6%, to AUD3.3 billion, driven by the strong performance of all segments as well as recent acquisitions. Company-wide EBIT (earnings before interest and taxation) rose by 32.2%, to AUD377.8 million.

Revenues from the company’s Australia/Asia operations rose 8.8%, to AUD2 billion, due to strong admissions growth. Ramsay completed AUD175 million in expansions at its existing 69 Australian hospitals and has another AUD190 million approved for further development. EBIT grew by 12.6%, to AUD282.8 million.

Ramsay’s U.K. revenues rose 9%, to GBP198.1 million, as its National Health Service admissions grew by 12%. EBIT in the U.K. increased 9.1%, to GBP15.5 million.

The company’s revenues in France surged 437.1%, to EUR646.1 million, as EBIT jumped 542.4%, to EUR46 million. The dramatic increase was due to its acquisition of Medipsy in December 2013 and the controlling interest it acquired in Générale de Santé in October 2014, which made Ramsay a market leader in France. Ramsay Sante has performed in accordance with management expectations during its first three months of operation.

Based on first-half results, management expects Core NPAT and Core EPS growth of 18% to 20% for fiscal 2015, respectively. This is up from prior growth guidance of 14% and 16%, respectively. The outlook includes nine months of contributions from Générale de Santé.

Ramsay’s interim dividend of AUD0.405 per share represents a 19.1% increase compared to the prior year’s payout. The dividend will be paid on March 26, 2015, for unitholders on record as of March 10, 2015.

Ramsay Health Care is a buy under USD52 on the ASX using the symbol RHC and on the U.S. OTC market using the symbol RMSYF.