The RBA’s neutral policy stance was reaffirmed in the August Statement on Monetary Policy (SMP). The RBA sees thecurrent accommodative monetary policy settings continuing “for some time yet”. Indeed, the Bank repeated the mantra ithas used since February 2014, noting that on current indications, “the most prudent course is likely to be a period of stabilityin interest rates”. The RBA characterises the outlook as “not materially different from that presented in the May SMP”. Thecentral bank says that the growth outlook reflects the opposing forces of the decline in mining investment and ongoing fiscalconsolidation on one side of the ledger, and support from low interest rates on the other. Overall, RBA management appearsrelatively comfortable about the transitioning economy and how the current indicators of domestic growth and inflation aretracking. Only minor alterations to the RBA’s forecasts bolster this view.
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