The Reserve Bank of Australia (RBA) Statement on Monetary Policy 6 February 2015 key headlines:
- Australian dollar above most estimates of fair value, providing less aid to the economy than it could
- Australian dollar giving less assistance to balanced growth than it could
- Says the February rate cut is to support demand, provides no forward guidance on rates
- Growth to be below trend for longer, spare capacity to last for some time yet
- Lowers GDP forecast for 2015 by 0.25 ppt, similar cut to underlying inflation out to 2016
- y/y GDP seen at 2.25-3.25 pct end 2015, 3-4 pct end 2016, 3-4.5 pct by June 2017
- Underlying inflation seen at 2.25 pct mid 2015, 2-3 pct end 2015 out to June 2017
- Unemployment to rise bit further, peak later than anticipated
- ABS data, liaison suggests mining investment could fall by more than 10 pct in 2014/15
- Non-mining investment still subdued, pick-up to occur later than previously expected
- Housing market will need to be watched carefully, regulators working to contain risks
- Fall in petrol prices likely to subtract 0.5 ppt from CPI in Q1, boost household incomes
- Ramp up in LNG output slower than expected, still add 0.75 ppt to GDP in 2016/17
- Uncertainties include outlook for commodity prices, divergent global monetary trends
- China growth projected at or little below 7 pct in 2015, property market a key uncertainty
Quick headlines via Reuters
Link to the full text: Statement on Monetary Policy
My earlier Preview of the RBA Statement on Monetary Policy
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A couple of things to note:
- The words on the AUD are little changed for what we have come to expect
- Little forward guidance on rates in the statement, that’s not unusual
AUD jumping on the release, first time it popped 0.7850 in quite a while … back below there now though
