RBA: No Change In Monetary Policy But Growth Forecasts Softer

Glenn Stevens / File

The Reserve Bank of Australia has released the minutes from its August board meeting, showing no major change in monetary policy.

Cash interest rates remain unchanged at 2.5%.

The RBA says the current monetary policy in Australia remained accommodative and supportive of demand.

Credit growth picked up a little and dwelling prices had continued to increase.

RBA staff forecasts suggest that inflation, despite recent higher readings, was likely to be consistent with the 2% to 3% target over the next two years.

GDP growth is likely to have slowed to a more moderate pace in the June quarter and is expected to be below trend this financial year before picking up.

“Output growth would probably be somewhat softer in the near term after recent higher readings, but was expected gradually to strengthen again over the forecast period,” the RBA minutes say.

“Members noted that there was inevitably a significant degree of uncertainty about the outlook, given the number of forces working in different directions.

“The board judged that monetary policy was appropriately configured and that, on present indications, the most prudent course was likely to be a period of stability in interest rates.”

Here’s the full text of the minutes.

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