AU: RBA Meeting Minutes

Mon Mar 19 19:30:00 CDT 2018

The Reserve Bank of Australia has published the minutes of its March 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 assessment of the outlook shown in the minutes is in line with public comments made by RBA Governor Philip Lowe in a speech given the day after the meeting. In that speech he noted that he expects economic growth to strengthen in 2018, unemployment to fall and inflation to increase "a little" from its current low rate. He also repeated at this speech his view that the next move in policy rates would likely be higher but that officials "do not see a strong case for a near-term adjustment of monetary policy".

Consistent with this assessment, the minutes note that growth and inflation are both expected to pick up this year, but also highlight that earlier improvements in the labour market have yet to result in stronger wages growth and reiterate concerns that high levels of household debt may reduce the scope for consumer spending to strengthen over the forecast period. The minutes also argue that the low level of interest rates sustained over 2017 had "played a role" in reducing unemployment and bringing inflation closer to target. Combined with earlier official comments, the minutes suggest that policy stability is likely to continue in the near-term but suggest that officials may consider a rate hike later in the year if growth and inflation rise in line with forecasts. The RBA"s next policy meeting is scheduled for early April.

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.