The minutes of the Reserve Bank of Australia’s (RBA) November monetary policy meeting released a few minutes before press time reiterated that while the next move in cash rates is likely to be on the higher side, there is no strong case for a near-term move.
Key points (Source: Reuters)
- members noted average real earnings had not risen for six years, remained a key uncertainty
- increase in wages growth necessary for inflation to reach the target range
- impact of slow incomes growth, high debt “warranted close monitoring”
- employment stronger than expected, unemployment to fall to 4.75% by mid-2020
- members noted could be “more pronounced decline” in unemployment in the near term
- fall in the AUD over 2018 likely to have been helpful for domestic economic growth
- data pointed to further solid GDP growth in the Sept qtr, to avg 3.5 pct over 2018 and 2019
- growth to be supported by accommodative monetary policy, stronger terms of trade
- Sydney and Melbourne housing markets had eased, credit tighter than has been for some time
- trade protectionism remained a significant risk to the global economy
- forecasts assumed a small negative impact on trading partner growth from tariffs
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