AU: RBA Meeting Minutes

Mon Oct 16 19:30:00 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 note that consumer spending growth had picked up in recent months, partly in response to improved conditions in the labour market, with business investment, government spending and net exports also strengthening in recent months. Officials, however, also pointed to signs that residential construction had plateaued and that housing market conditions had cooled in Australia's two largest cities, Sydney and Melbourne. They also reiterated their concerns that slow wages growth and high levels of household debt could limit the scope for stronger growth in household spending.

Officials expect weakness in wage growth to fade only gradually, reinforcing their forecast for inflation to rise at a similarly gradual pace. They also again noted that any further appreciation of the Australian dollar would likely result in a slower pick-up in economic activity and inflation than currently forecast.

The minutes again concluded by noting that available information had persuaded officials that current policy settings remained appropriate. Despite concerns about household debt and the exchange rate, the minutes suggests the RBA remains comfortable with the growth and inflation outlook and sees little case for any change in policy in the near term.

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.