RBA SoMP: Decline in AUD would be positive for growth, inflation
|In its quarterly Statement of Monetary Policy (SoMP) released on Friday, the Reserve Bank of Australia (RBA), highlights that the depreciation in the exchange rate on the back of broad US dollar strength is likely to ne positive for growth and inflation.
Key Headlines (via Reuters):
GDP growth is expected to remain above trend.
Board sees no strong case for near-term move in rates.
Steady monetary policy promoting stability and confidence
RBA trims underlying inflation forecast to 1.75 pct in Dec 2018, sees 2 pct in Dec 2019, 2.25 pct in Dec 2020.
RBA revised forecast for terms of trade higher due to coal prices.
Ongoing solid growth in non-mining investment is anticipated and the current rate of consumption growth is expected to continue.
Exports are expected to continue growing, but with some change in composition.
The outlook for consumption remains uncertain.
US growth could be stronger than expected.
Chinese authorities continue to balance financial risks against growth.
Rural exports likely to be softer in the second half of 2018 due to drought.
Govt budgets suggest public investment to continue supporting growth.
Sydney and Melbourne housing markets easing, but price declines modestly so far.
Average rates paid across all mortgages have drifted down over past year.
CPI growth likely to be "quite low" in q3 due to one-off policy changes.
GDP growth looks to have remained solid in q2, y/y rate to remain above trend.
Rising resource exports to add to growth over the next two years.
The economy will not face broad-based capacity constraints for "some time".
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