The Reserve Bank of Australia has released the May Statement on Monetary Policy.
”The central bank upgraded forecasts for the country’s economy on Friday led by record low interest rates and generous fiscal support, though inflation and wages growth are still seen lagging in a sign monetary policy will remain “highly accommodative” for years to come,” Reuters reports.
”In its 82-page quarterly Statement on Monetary Policy, the Reserve Bank of Australia (RBA) predicted economic growth could almost hit double figures in the current quarter, a huge turnaround from last year’s pandemic-induced recession.”
”Yet it emphasised the economy remains well short of full employment and wage growth is just too slow.”
These updated forecasts as follows will be closely scrutinised by markets:
ECONOMY BEATING FORECASTS BUT POLICY NEEDS TO REMAIN HIGHLY ACCOMMODATIVE
06-May-2021 19:30:01 – RBA SOMP: WILL NOT RAISE RATES UNTIL ACTUAL INFLATION IN TARGET RANGE, UNLIKELY UNTIL 2024
06-May-2021 19:30:01 – RBA RAISES GROWTH FORECASTS, GDP EXPECTED TO HAVE REACHED PRE-PANDEMIC LEVELS IN Q1 2021
06-May-2021 19:30:01 – RBA SEES UNEMPLOYMENT JUNE 2021 AT 5.25%, DEC 2021 AT 5.0%, DEC 2022 AT 4.5%, JUNE 2023 AT 4.5%
06-May-2021 19:30:01 – RBA SEES UNDERLYING INFLATION JUNE 2021 AT 1.5%, DEC 2021 AT 1.5%, DEC 2022 AT 1.75%, JUNE 2023 AT 2.0%
06-May-2021 19:30:01 – RBA SEES JUNE 2021 GDP AT 9.25%, DEC 2021 AT 4.75%, DEC 2022 AT 3.5%, JUNE 2023 AT 3%
06-May-2021 19:30:01 – RBA SEES WAGE GROWTH JUNE 2021 AT 1.5%, DEC 2021 AT 1.75%, DEC 2022 AT 2.25%, JUNE 2023 AT 2.25%
06-May-2021 19:30:01 – RBA: WAGE GROWTH HAS BEEN ESPECIALLY SLOW, EXPECTED TO REMAIN LOW
06-May-2021 19:30:01 – RBA: WILL BE “SOME YEARS” BEFORE WAGE GROWTH FAST ENOUGH TO LIFT INFLATION TO TARGET
06-May-2021 19:30:01 – RBA: END OF JOBKEEPER LOSSES TO BE MORE THAN OFFSET BY LABOUR DEMAND OVERALL
06-May-2021 19:30:01 – RBA BASELINE SCENARIO ASSUMES VACCINATIONS PICK UP IN 2H, BORDERS REOPEN IN EARLY 2022
06-May-2021 19:30:01 – RBA UPSIDE SCENARIO SEES UNEMPLOYMENT AT 3.75% BY MID-2023, CORE INFLATION AT 2.25%
06-May-2021 19:30:01 – RBA: BORDER CLOSURE HAD LIMITED OVERALL IMPACT SO FAR, COULD PUSH UP WAGES IF EXTENDED
06-May-2021 19:30:01 – RBA: HOUSEHOLD CONSUMPTION AND SAVINGS AN IMPORTANT SOURCE OF UNCERTAINTY
06-May-2021 19:30:01 – RBA: BOOST TO HOUSEHOLD INCOMES, WEALTH TO OFFSET DRAG FROM SLOW POPULATION GROWTH
06-May-2021 19:30:01 – RBA: CLOSELY MONITORING HOME LENDING TO ENSURE STANDARDS ARE MAINTAINED
06-May-2021 19:30:01 – RBA SOMP: LEVEL OF A$ BROADLY CONSISTENT WITH FUNDAMENTALS
More to come…
The RBA Monetary Policy Statement released by the Reserve bank of Australia reviews economic and financial conditions determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth.
It is considered as a clear guide to the future RBA interest rate policy. Any changes in this report affect the AUD volatility.
If the RBA statement shows a hawkish outlook, that is seen as positive (or bullish) for the AUD, while a dovish outlook is seen as negative (or bearish).
