AU: RBA Meeting Minutes

Mon Feb 19 18:30:00 CST 2018

The Reserve Bank of Australia has published the minutes of its February 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.

The minutes show that officials remain cautiously optimistic about the outlook. Despite relatively subdued growth in wages and consumer spending in Australia, officials retained their forecast that economic growth would pick up to average a little above 3.0 percent and that the unemployment rate would fall over the next two years. This, they argued, would eventually drive a gradual increase in consumer price inflation to a little above 2.0 percent in 2018.

Since the February meeting and the release of the quarterly Statement of Monetary Policy a few days after that meeting, RBA Governor Philip Lowe has provided a more up-to-date summary of his views about the economic and policy outlook in a public appearance before legislators. In these comments he noted that if unemployment falls and inflation rises in line with current RBA forecasts over the coming year, then he believes "at some point it will be appropriate to have less monetary stimulus and for interest rates in Australia to move up". Although he noted that right now officials do not see a strong case for changing policy settings in the near-term, he also stressed that in his view the next move in policy rates will be up, rather than down. The RBA's next policy meeting is scheduled for early March.

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.