Although there were only few changes from the post-meeting statement, the RBA minutes for the November meeting delivered a rather dovish tone on the monetary outlook. Although policymakers noted that leaving interest rates on hold during the month was an appropriate decision, it did not close the door for further rate cuts. Moreover, the central bank warned that exchange rate was at 'uncomfortably high' level. Australian dollar declined after the release.
The central bank spent some time to discuss about the Australian dollar movement. It stated that 'despite the recent appreciation, the exchange rate had depreciated in net terms since earlier in the year, with the result that rising import prices were expected to exert an upward influence on tradables prices in coming quarters'. Moreover, the RBA members estimated that 'the exchange rate was around 5% higher than its trough in early August and 10% below its peak in April'. In sum, the RBA warned that the AUD remained 'uncomfortably high' and 'a lower level of the exchange rate would likely be needed to achieve balanced growth in the economy'.
In the September and October minutes, the RBA concluded by stating that 'members agreed that the Bank should again neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them'. However, this reference was omitted in November. Instead, the central bank noted that 'it was prudent to hold the cash rate steady while continuing to gauge the effects, but not to close off the possibility of reducing it further should that be appropriate to support sustainable growth in economic activity, consistent with the inflation target'.
It appears that the RBA was suggesting that a easing bias of monetary stance remained. However, it doesn't seem to be likely that the central bank would act further in the near-term. The next focus would be RBA Governor Glenn Stevens' speech on Thursday at the annual conference of the Australian Business Economists on the topic of 'The Australian Dollar: Thirty Years of Floating'.
The central bank spent some time to discuss about the Australian dollar movement. It stated that 'despite the recent appreciation, the exchange rate had depreciated in net terms since earlier in the year, with the result that rising import prices were expected to exert an upward influence on tradables prices in coming quarters'. Moreover, the RBA members estimated that 'the exchange rate was around 5% higher than its trough in early August and 10% below its peak in April'. In sum, the RBA warned that the AUD remained 'uncomfortably high' and 'a lower level of the exchange rate would likely be needed to achieve balanced growth in the economy'.
In the September and October minutes, the RBA concluded by stating that 'members agreed that the Bank should again neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them'. However, this reference was omitted in November. Instead, the central bank noted that 'it was prudent to hold the cash rate steady while continuing to gauge the effects, but not to close off the possibility of reducing it further should that be appropriate to support sustainable growth in economic activity, consistent with the inflation target'.
It appears that the RBA was suggesting that a easing bias of monetary stance remained. However, it doesn't seem to be likely that the central bank would act further in the near-term. The next focus would be RBA Governor Glenn Stevens' speech on Thursday at the annual conference of the Australian Business Economists on the topic of 'The Australian Dollar: Thirty Years of Floating'.
0 comments :
Post a Comment