Reserve Bank of Australia October 2021 board meeting

Governor Lowe's statement text:

Summary Headlines via Reuters:

  • to maintain the cash rate target at 10 basis points and the interest rate on exchange settlement balances at zero per cent
  • to maintain the target of 10 basis points for the April 2024 Australian government bond
  • to continue to purchase government securities at the rate of $4 billion a week until at least mid-February 2022.

And:

  • says the central scenario is that the conditions for a rate rise will not be met before 2024
  • committed to maintaining highly supportive monetary conditions
  • setback to the economic expansion in Australia is expected to be only temporary
  • as vaccination rates increase further and restrictions are eased, the economy is expected to bounce back.
  • the economy will be growing again in the December quarter
  • package of policies is providing substantial and ongoing support to the Australian economy.
  • bank's business liaison and data on job vacancies suggest that many firms are seeking to hire workers ahead of the expected reopening
  • wage and price pressures remain subdued in Australia
  • it is important that lending standards are maintained and that loan serviceability buffers are appropriate
  • wage and price pressures remain subdued
  • bank's business liaison and data on job vacancies suggest that many firms are seeking to hire workers ahead of the expected reopening in October and November.

Saying yet again it doesn't expect a rate rise until 2024. Lowe has said this over and over. Scanning that summary a once again upbeat view from the Bank.

Tomorrow brings the RBNZ decision at which they are expected to hike the cash rate by 25bps as the first step in a series of hikes to come. I've heard the argument that such a move is already priced into AUD/NZD. I'm not sure about that but given the policy divergence expectations have been being signalled for months I can see where these folks are coming from.

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Background to this:

rba goverrnor lowe