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16 Apr 2013
RBA reiterates scope to ease; further assessment needed
FXstreet.com (Barcelona) - On its considerations for monetary policy from the latest RBA minutes just released, which refers to the policy meeting from last April 2, the central bank reiterated its stance on 'further scope to ease' if necessary.
For now though, they pointed at 'the most prudent course being to hold rates steady and to continue to assess developments over the period ahead.' RBA added that effects of rate cuts still have further to run into the economy, noting that they will continue to assess developments over the period ahead
Considerations for Monetary Policy from the RBA
"Overall, recent data suggested that interest-sensitive parts of the economy were responding to the historically low levels of lending rates and it remained likely that this had further to run. At the same time, the factors weighing on the economy – including the high exchange rate, the waning growth of mining investment, and fiscal consolidation – were likely to persist. The key issues were what the balance of these factors would turn out to be. With growth forecast to be a little below trend in 2013, and inflation close to target, members judged that it was appropriate for the stance of policy to be accommodative. The outlook for inflation, as currently assessed, would provide scope for further easing should that be necessary to support demand. At this meeting, the Board's judgement remained that, on the information currently to hand, the most prudent course was to hold rates steady and to continue to assess developments over the period ahead."
For now though, they pointed at 'the most prudent course being to hold rates steady and to continue to assess developments over the period ahead.' RBA added that effects of rate cuts still have further to run into the economy, noting that they will continue to assess developments over the period ahead
Considerations for Monetary Policy from the RBA
"Overall, recent data suggested that interest-sensitive parts of the economy were responding to the historically low levels of lending rates and it remained likely that this had further to run. At the same time, the factors weighing on the economy – including the high exchange rate, the waning growth of mining investment, and fiscal consolidation – were likely to persist. The key issues were what the balance of these factors would turn out to be. With growth forecast to be a little below trend in 2013, and inflation close to target, members judged that it was appropriate for the stance of policy to be accommodative. The outlook for inflation, as currently assessed, would provide scope for further easing should that be necessary to support demand. At this meeting, the Board's judgement remained that, on the information currently to hand, the most prudent course was to hold rates steady and to continue to assess developments over the period ahead."