AU: RBA Meeting Minutes

June 19, 2017 08:30 CDT

The Reserve Bank of Australia has published the minutes of its June 6 meeting. Officials at that meeting kept the policy interest rate unchanged at a record low of 1.50 percent, again concluding that current policy settings were consistent with sustainable growth and achieving the inflation target "over time". This rate was last changed in August 2016 when it was cut by 25 basis points.

Officials noted in the minutes that recent data had indicated further improvement in the global economy, but highlighted the ongoing slowdown in business and property investment in China. Looking at the domestic economy, officials anticipated that gross domestic product data, scheduled to be released the day after their meeting, would likely show slower economic growth in the three months to March. Nevertheless, officials argued that the transition to lower levels of mining investment, a factor that had weighed on headline GDP growth in recent years, was now "almost complete". Reflecting this assessment, they expressed confidence that growth would pick up to a little above 3.0 percent over the medium-term despite reservations about labour market and housing market conditions.

Despite solid gains in headline employment, officials noted that wage growth had been low and would likely remain so "for some time yet" but also repeated their view that inflation would increase "gradually" as the economy strengthened. Based on this outlook, officials again concluded that current policy settings were appropriate, and provided little indication that they see a strong case for any shift in policy settings over the next few months. With little major data scheduled for release before the RBA's next policy meeting in early July, officials may prefer to wait for the publication of quarterly inflation data later in the month before considering whether a change in policy is warranted.

The Reserve Bank of Australia (RBA) publishes minutes of its meetings with a two week lag. The text expands on the statement published two weeks earlier at the time of the announcement.

Although the RBA's Reserve Bank Board issues a detailed statement at the conclusion of its monthly meetings, investors also look to the minutes for a more detailed description of current economic outlook both domestically and abroad along with the latest RBB policy thinking.

It is only recently that the RBA has released meeting minutes. At the conclusion of their December 2007 meeting, the RBA announced several changes to its communications policy. Previously, a statement was released only if a policy change was made. Now a statement is released at the conclusion of every meeting. Another change concerned the timing of the policy announcement. Rather than waiting until the next day, the announcement occurs immediately after the conclusion of the meeting. In addition, minutes are now released two weeks after the meeting.