Reserve Bank of Australia Statement on Monetary Policy (SoMP) August 2020
- Says the Australian dollar is in a range broadly consistent with its fundamentals
Headlines via Reuters
- says board will not increase the cash rate target until progress is being made towards full employment, inflation target
- forecasts y/y GDP at -6% for June, -6% for December, +5% Dec. 2021, +4% Dec. 2022
- says board is committed to doing what it can to support jobs, incomes and businesses
- forecasts unemployment 10% for Dec, 8.5% Dec 2021, 7% Dec 2022
- forecasts CPI +1.25% for Dec, +1% Dec 2021, +1.5% Dec 2022
- says further purchases of Australia govt bonds will be undertaken as necessary in secondary market
- forecasts trimmed mean inflation +1% for Dec, +1% Dec 2021, +1.5% Dec 2022
- says monetary financing of budget deficits is not an option under consideration in Australia
- says forecasts assume cash rate, three yr yields target remain at current levels
- says given the nature of the challenges posed by the pandemic, there was no need to adjust the mid-March package
- says board has, however, not ruled out adjusting this package in the future if circumstances warranted
- says a gradual recovery in GDP is now underway across much of the country
- says board continues to view negative interest rates as being extraordinary unlikely in Australia
- says heightened activity restrictions in Victoria are likely to offset the pick-up in GDP
- says the Australian dollar is now in a range that is broadly consistent with its fundamental determinants
- says Victoria restrictions likely to reduce q3 GDP growth by at least 2 percentage points
- says the pace of Australia's economic recovery is expected to be slower than previously forecast
- says the measures taken to address the current outbreak in Victoria state will further delay the recovery
Also:
As part of its review, the Board also discussed experience with a range of other possible monetary measures, including foreign exchange intervention and negative interest rates.
Both were rejected.
Bolding above is mine
Full text:
RBA Governor Lowe: