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17 Dec 2013
RBA minutes: not closing off possibility of easing further
FXstreet.com (Bali) - Minutes of the Monetary Policy Meeting of the Reserve Bank Board are out, with the key headlines below.
"At recent meetings, the Board had judged that leaving the cash rate unchanged was appropriate while continuing to gauge the effects of the substantial degree of monetary policy stimulus that had already been put in place."
"There had been further signs of the stimulatory effects of low interest rates, most notably in the housing market, and additional effects were still likely to be coming through. At the same time, inflation remained within the target. While the exchange rate had depreciated over the month, members agreed that it remained uncomfortably high and a lower level would likely be needed to achieve balanced growth in the economy."
"The Board's judgement remained that, given the substantial degree of policy stimulus that had been imparted, it was prudent to hold the cash rate steady while continuing to gauge the effects of earlier reductions, but not to close off the possibility of reducing it further should that be appropriate to support sustainable growth in economic activity, consistent with the inflation target."
" A$ remains uncomfortably high, lower level needed for balanced growth."
"In China, growth looked to have been a bit stronger in the second half of the year than in the first half and, for 2013, was likely to be around, or even a little above, the government's 7. 5 per cent target. House prices and transaction volumes had increased further in recent months and most indicators of activity had remained strong."
"Labour market conditions had remained soft, with the level of employment flat since around the start of the year. While the unemployment rate had been little changed since the middle of the year, the participation rate had declined noticeably over the same period."
"There had been some tentative signs of a stabilisation in forward-looking indicators of labour demand – including reports from liaison of a slight improvement in employment intentions – although these remained at low levels."
"The decline in wage growth over the past year would help keep inflation consistent with the medium-term target. Business surveys and liaison suggested that wage pressures were likely to remain modest in the period ahead."
"Public statements by mining companies and information from the Bank's liaison suggested that mining investment would be likely to decline over the period ahead."
"At recent meetings, the Board had judged that leaving the cash rate unchanged was appropriate while continuing to gauge the effects of the substantial degree of monetary policy stimulus that had already been put in place."
"There had been further signs of the stimulatory effects of low interest rates, most notably in the housing market, and additional effects were still likely to be coming through. At the same time, inflation remained within the target. While the exchange rate had depreciated over the month, members agreed that it remained uncomfortably high and a lower level would likely be needed to achieve balanced growth in the economy."
"The Board's judgement remained that, given the substantial degree of policy stimulus that had been imparted, it was prudent to hold the cash rate steady while continuing to gauge the effects of earlier reductions, but not to close off the possibility of reducing it further should that be appropriate to support sustainable growth in economic activity, consistent with the inflation target."
" A$ remains uncomfortably high, lower level needed for balanced growth."
"In China, growth looked to have been a bit stronger in the second half of the year than in the first half and, for 2013, was likely to be around, or even a little above, the government's 7. 5 per cent target. House prices and transaction volumes had increased further in recent months and most indicators of activity had remained strong."
"Labour market conditions had remained soft, with the level of employment flat since around the start of the year. While the unemployment rate had been little changed since the middle of the year, the participation rate had declined noticeably over the same period."
"There had been some tentative signs of a stabilisation in forward-looking indicators of labour demand – including reports from liaison of a slight improvement in employment intentions – although these remained at low levels."
"The decline in wage growth over the past year would help keep inflation consistent with the medium-term target. Business surveys and liaison suggested that wage pressures were likely to remain modest in the period ahead."
"Public statements by mining companies and information from the Bank's liaison suggested that mining investment would be likely to decline over the period ahead."