RBA Minutes: Accomadative approach as long as needed

The Reserve Bank of Australia’s August meeting minutes have been released and headlines are coming through as follows:

RBA minutes

• RESERVE BANK OF AUSTRALIA MINUTES: TARGET FOR THREE-YEAR YIELDS TO BE MAINTAINED UNTIL PROGRESS MADE TOWARDS FULL EMPLOYMENT, INFLATION
• 17-Aug-2020 19:30:24 – RBA MINUTES: ACCOMMODATIVE APPROACH WILL BE MAINTAINED FOR AS LONG AS NECESSARY
• 17-Aug-2020 19:30:33 – RBA MINUTES: MEMBERS NOTED THAT THE DOWNTURN HAD NOT BEEN AS SEVERE AS EARLIER EXPECTED
• 17-Aug-2020 19:30:34 – RBA MINUTES: LIKELY THAT FISCAL AND MONETARY SUPPORT WOULD BE REQUIRED FOR SOME TIME
• 17-Aug-2020 19:30:48 – RBA MINUTES: MEMBERS NOTED A RECOVERY WAS UNDER WAY IN MOST OF AUSTRALIA
• 17-Aug-2020 19:31:04 – RBA MINUTES: THE RECOVERY WAS, HOWEVER, LIKELY TO BE SLOWER THAN EARLIER EXPECTED, WITH THE COVID-19 OUTBREAK IN VICTORIA HAVING A MAJOR IMPACT ON THE ECONOMY
• 17-Aug-2020 19:31:09 – RBA MINUTES: BOARD WELCOMED GOVERNMENT’S ANNOUNCEMENT THAT VARIOUS INCOME SUPPORT MEASURES WOULD BE EXTENDED

More to come…

Traders are looking to these headlines to provide additional colour on the Board’s policy discussions.

The quarterly statement plus a recent testimony from Governor Lowe and colleagues was likely meaning there will be little new from them and therefore may not impact the currency significantly. 

Description

The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.