RBA ready to “ease monetary policy further if needed” – ANZ

David Plank, head of Australian economics at ANZ, points out that the RBA kept the cash rate at 1% in August, but retained an explicit easing bias.

Key Quotes

“The Board will continue to monitor developments in the labour market closely and ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time.”

“We note that “adjust monetary policy” in the July statement has become “ease monetary policy” in August. While the change is not of great significance, it reinforces the fact there is only one direction for the cash rate at present.”

“The growth forecasts for 2019 and 2020 are in line with what we expected from the RBA. In terms of inflation, we expect the RBA to round its published numbers to 2% for both 2020 and 2021, but 2¼% for 2021 is a possibility given the RBA’s description.”