AU: RBA Meeting Minutes

Mon Sep 18 20:30:00 CDT 2017

The Reserve Bank of Australia has published the minutes of its September 5 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.

The minutes start by noting recents signs of ongoing improvement in the domestic labour market, though officials pointed out that wage growth remains low and looks likely to remain that way, consistent with their forecasts. Officials also discussed the domestic housing market at length, noting that conditions had moderated to some extent in Australia's largest city, Sydney, but to a lesser extent in the second-largest city, Melbourne. Nevertheless, officials again expressed concern about high levels of borrowing for housing and household debt.

Officials again discussed the impact of the recent appreciation of the domestic currency, noting the impact that this and any further appreciation would have on the growth and inflation outlook. Since the meeting the Australian dollar has remained at relatively strong levels. Officials also discussed the outlook for Chinese demand for iron ore, arguing this would likely wane in the period ahead.

The minutes concluded by noting that available information had persuaded officials that current policy settings remained appropriate. The minutes' discussion of the labour market, exchange rate and levels of household debt suggest there are offsetting pressures that could extend this period of policy stability at least for the next few months.

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.