RBA minutes: Policy steady most prudent course of action

The minutes of the July RBA meeting when interest rates were held unchanged at 1.75% have been released.

As the RBA minutes notes: " Taking account of the available information, the Board judged that holding monetary policy steady would be the most prudent course of action at this meeting. The Board noted that further information on inflationary pressures, the labour market and housing market activity would be available over the following month and that the staff would provide an update of their forecasts ahead of the August Statement on Monetary Policy. This information would allow the Board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate."

On the AUD, the RBA observes: " Commodity prices had generally increased since the previous meeting. At the time of the present meeting, the Australian dollar (in trade-weighted terms) was around the levels assumed in the forecasts at the time of the May Statement on Monetary Policy."

Key headlines - Reuters

• Repeats rising AUD would complicate economic rebalancing
• Watching data on inflation, employment and housing to refine outlook for economy
• "To make any adjustment to the stance of policy that may be appropriate" depending on data
• RBA Board also awaiting updated staff forecasts for August review
• Data suggested Australian economy grew at moderate pace in Q2, net exports less of a boost
• Inflation expected to remain quite low for some time given subdued wages, cost pressures
• Measures of inflation expectations remained below average
• Liaison suggested retail sales picked up in June, but price discounting continuing
• Recent labour data more mixed, leading indicators still pointed to jobs growth
• Transition of economic activity to non-resources sector "well advanced"
• Liaison pointed to growth in non-mining business investment
• RBA judged uncertainty caused by Brexit to have only a modest impact on global growth