RBA Minutes: Higher AUD Could Complicate Economy Rebalance
The minutes of the April 5th RBA meeting when interest rates were held
steady at 2%, and in which the Central continued to maintain a soft
dovish bias to ease further if needed, have been released.
The minutes noted: "Members judged that there were reasonable prospects for continued growth in the economy, with inflation close to target. The Board therefore decided that the current setting of monetary policy remained appropriate."
"New information would allow the Board to reassess the outlook for inflation and decide whether the improvement in labour market conditions evident last year was continuing. Continued low inflation would provide scope to ease monetary policy further, should that be appropriate to lend support to demand", the minutes added.
The minutes repeated one of the key themes shared last April 5th, noting that a "higher AUD could complicate economy rebalance."
Key headlines - Reuters
Low inflation would provide scope to ease policy if necessary
Saw reasonable prospects for continued moderate economic growth
Appropriate for policy to be "very accommodative" given low inflation, higher a$
A rising a$ could complicate economic rebalancing, keep inflation low
Board noted service sector exports sensitive to a$, discussed impact of a$ more broadly
A$ rise due in part to higher commodity prices, expectations of slower fed hikes
Low interest rates had played important role in boosting consumption, housing market
Awaiting new information on inflation, whether jobs strength would be maintained
Members noted labour market noticeably stronger than year earlier
Slowdown in employment growth in early 2016 was to be expected
Recent data consistent with further moderate growth in economy in q1
Liaison reported retail trading conditions were generally favourable
Rise in china social financing a sign of beijing's willingness to support growth there
Growth in australia's major trading partners seen a little below average