Westpac, in brief, on the RBA minutes that were published Tuesday:

  • The current level of the cash rate is assessed as being just right for the time being, but things could change. The Board also picks a happy medium as the future model for implementing policy.
  • The minutes of the late-March meeting of the RBA Board recorded that the data had turned out broadly as expected, and that this supported keeping the cash rate on hold. Unlike the February minutes, there was no mention of multiple policy options. While the Board endorsed the language of not ruling anything in or out, it seems that policy actions other than keeping rates unchanged were not on the table at this meeting. The current level of the cash rate is assessed as being just right at least for the time being.
  • The other main decision recorded in the minutes related to the operational arrangements for monetary policy. Here, too, the Board has opted for a happy medium of ample, but not excess, reserves. This decision has no implications for the stance of monetary policy. However, it does imply that the RBA’s balance sheet will remain somewhat larger in future than it was before the pandemic.

These are the main points from Luci Ellis, Chief Economist at WPAC, and previously Assistant Governor (Economic) at the RBA.

Reserve Bank of Australia's Luci Ellis, Assistant Governor (Economic) speaking to the Committee for

More on the minutes here: