The minutes of the July RBA meeting when interest rates were held unchanged at 1.5% have been released, highlighting that the Central Bank now estimates neutral real rate had fallen to around 1%, while neutral nominal rate stands at 3.5%.
As the RBA minutes note: "Taking into account all the available information, the Board judged that holding the accommodative stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time."
Judged steady policy stance consistent with growth, inflation targets
Saw welcome improvement in world economy, number of central banks more positive
Domestic labour, housing markets continued to warrant careful monitoring
Repeats a rising a$ would complicate economic rebalancing
Australian economic data for q2 had generally been positive
Data suggest gdp growth increased in q2, household consumption picked up
Jobs data positive, provided further confirmation of improvement in labour market
Recent rise in employment to support household incomes, spending
Underemployment still elevated, wage pressures subdued
Fiscal policy to be more expansionary in 2017/18 than previously expected
Stronger infrastructure spending to have significant positive spillovers to economy
Too early for tighter lending rules to have full effect on housing market
Estimates neutral real rate had fallen to around 1 pct, neutral nominal rate at 3.5 pct
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