RBA Minutes: Higher AUD Could Complicate Economy Rebalance

RBA Minutes: Higher AUD Could Complicate Economy Rebalance

The minutes of the April 5th RBA meeting when interest rates were held steady at 2%, and in which the Central continued to maintain a soft dovish bias to ease further if needed, have been released.

The minutes noted: "Members judged that there were reasonable prospects for continued growth in the economy, with inflation close to target. The Board therefore decided that the current setting of monetary policy remained appropriate."

"New information would allow the Board to reassess the outlook for inflation and decide whether the improvement in labour market conditions evident last year was continuing. Continued low inflation would provide scope to ease monetary policy further, should that be appropriate to lend support to demand", the minutes added.

The minutes repeated one of the key themes shared last April 5th, noting that a "higher AUD could complicate economy rebalance."

Key headlines - Reuters

Low inflation would provide scope to ease policy if necessary

Saw reasonable prospects for continued moderate economic growth

Appropriate for policy to be "very accommodative" given low inflation, higher a$

A rising a$ could complicate economic rebalancing, keep inflation low

Board noted service sector exports sensitive to a$, discussed impact of a$ more broadly

A$ rise due in part to higher commodity prices, expectations of slower fed hikes

Low interest rates had played important role in boosting consumption, housing market

Awaiting new information on inflation, whether jobs strength would be maintained

Members noted labour market noticeably stronger than year earlier

Slowdown in employment growth in early 2016 was to be expected

Recent data consistent with further moderate growth in economy in q1

Liaison reported retail trading conditions were generally favourable

Rise in china social financing a sign of beijing's willingness to support growth there

Growth in australia's major trading partners seen a little below average