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Analysts at TD Securities note that  RBA’s semi-annual testimony contained no real news and is likely to hold the cash rate “steady for a while yet” since it will most probably take some time for Australia to reach full employment and the inflation rate to be comfortably within the target range on a sustained basis.

Key Quotes

“RBA is prepared to maintain the current monetary policy stance until these benchmarks are more clearly in sight. (i.e. forecasts are for late 2020). Governor Lowe also mentioned that a lower AUD would be “helpful” in stimulating growth and boosting inflation.”

“He rejected altering the 2-3% inflation target regime. In the slowing housing market, along with a reduced demand for credit by investors there has also been the tightening in the supply of credit partly due to the royal commission into banking.”