The RBA Governor has just released his statement after this morning’s RBA Board meeting.
There are a lot of words which basically say global growth is recovering and monetary policy is working, in what is a quite positive statement on the path of growth for the Australian economy.
Here are three key takeaways in the Governor’s statement.
The economic transition Australia needs is taking place
The RBA was pretty upbeat in the context of the decision to hold rates steady for an extended period saying that there has been an improvement in consumer demand and a “strong expansion in housing construction.” Equally business conditions are improving and crucially, in the context of the Aussie dollar, the RBA notes exports are rising. Certainly they remain concerned about investment intentions in non-mining business investment but overall the tone is positive.
They also highlighted that inflation is and won’t be a problem.
Employment has been weak but is looking better
The RBA also highlights the fact that while employment has been weak “recently, there has been some improvement in indicators for the labour market” and while this will take some time the outlook is brighter.
This feeds straight back into the improving domestic economic outlook.
The Aussie dollar is still too high but won’t harm growth too much
The RBA highlighted once again that the dollar is high by historical standards and but is not a handbrake on growth. It is simply not adding as much as it had previously to the growth outlook because of the recent rise against the greenback.
So while they also reiterated that the Aussie “remains high by historical standards” the RBA is unlikely they to do anything about the Aussie or that it is impacting on their growth outlook materially.
So all up a continuation of a period of stable rates.
We’ll hear more from them in Friday’s quarterly Statement on Monetary Policy but for now the Governor’s statement speaks of an RBA Board and management happy with the trajectory of Australian economic growth.
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