RBA June meeting minutes - warning on higher AUD

21 June 2016, 05:21
Sherif Hasan
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Reserve Bank of Australia June meeting minutes out now

  • Appreciation of AUD could complicate adjustment of economy to the lower terms of trade
  • Board judged leaving rates steady at June 7 meeting was consistent with sustainable growth
  • Low interest rates and weaker AUD since 2013 helped support above potential growth in Q1
  • Q2 growth to be more moderate, but year-ended growth should stay slightly above potential
  • Growth in household disposable income had been stronger than measures of income growth for overall economy
  • Employment growth appeared to have lost some momentum, this was largely as expected
  • Labour costs pressure subdued in Q1, but a few measures were slightly more positive
  • Saw inflation staying low for some time, inflation expectations had remained below average
  • House prices had begun to rise again recently, but extent of rises to be affected by considerable supply of apartments
  • Noted uncertainty about UK referendum on EU membership had resulted in increased sterling volatility
  • Growth in Australia's major trading partners moderated in Q1 as largely expected


AUD/USD popped its overnight high (briefly) on the minutes. The minutes show a reasonable sanguine RBA, domestic economy seen as positive. Inflation outlook is subdued.

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