Comments by RBA governor, Philip Lowe, in Darwin
- Recent rate cuts will help lower unemployment, reduce spare capacity
- Will closely monitor how things evolve over the coming months
- Board is aware that there are some downsides to lower rates
- Sees options other than monetary easing, including fiscal support
- Says AUD TWI at bottom-end of the range, helping to support the economy
That's mainly a reiteration of the central bank statement earlier but it reinforces the notion of the subtle change made by adding the "if needed" wording.
June:The Board will continue to monitor developments in the labour market closely and adjust monetary policy to support sustainable growth in the economy and the achievement of the inflation target over time.
July:The Board will continue to monitor developments in the labour market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time.
That goes to show that unless economic developments take a turn for the worse and global trade conditions also worsen significantly, the RBA should stay on the sidelines for at least until Q4 2019 in my view.
