RBA minutes: “Significant uncertainties” on the economic outlook

The Reserve Bank of Australia (RBA) board shifted its bias to cash rate position by terming the rate change outlook "more evenly balanced than previously," in its recent monetary policy meeting on February 05. The minutes released at 00:30 GMT on February 19 says the Monetary Policy Board saw "significant uncertainties" on the economic outlook while seeing themselves as a source of stability.

Key points (Source: RBA)

  • Monetary Policy Board saw "significant uncertainties" on the economic outlook.
  • Board saw scenarios where interest rates could eventually rise, or fall.
  • Probabilities around these scenarios were more evenly balanced than before.
  • No strong case for near-term move in rates, better to be a source of stability.
  • Current policy should allow for progress on unemployment and inflation.
  • Members would continue to "assess the outlook carefully".
  • Board spent some time on housing market, price falls large by historical standards.
  • Given past rise in prices, the recent fall should have a only a small economic impact.
  • However "if prices were to fall much further" it could weaken consumption, gdp.
  • Outlook for consumption a "key uncertainty" for policy.
  • Notable drop in home loan approvals by banks due to weaker demand, tighter credit.
  • Pipeline of dwelling investment large, but likely to decline faster than first thought.
  • Labour market stronger than other economic data.
  • Board noted downside risks to global economy had increased.
  • Signs china growth had slowed more than implied by gdp data.
  • Trade tensions a "material risk" to the global outlook.

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