At their April monetary policy decision, the RBA kept rates on hold at record lows of 1.5%.
Key Points From the Statement
Global economy continues to improved;
Maintaining rates at current levels is consistent with growth and inflation targets;
Strong commodity prices are providing a significant lift to Australian national income;
Australian economy is continuing the transition from mining investment boom- [Check our infographics];
Recent data is consistent with moderate growth;
Some employment indicators have softened;
Unemployment rate has increased slightly;
Recent supervisory measures should help deal with the risks associated with rising indebtedness;
Reduced reliance on interest only housing loans would be a positive development;
House prices rising strongly in some markets;
A rising AUD would complicate the economy’s transition away from mining;
The pickup in underlying inflation is expected to be gradual.
Summary
There were two key changes in this month’s statement:
The commentary regarding the domestic economy is a little less optimistic with the momentum in growth described as “ongoing moderate growth”. The commentary around the labour market is equally subdued with the RBA acknowledging weakness in certain indicator as the unemployment rate has increased and employment growth has remained modest. Forward-looking indicators point to continued growth though the phrase “still point” suggests that the bank is not thoroughly convinced that this will continue. The governor also noted that “wage growth remains slow”
Read more: https://www.orbex.com/blog/2017/04/aud-craters-as-rba-keep-rates-on-hold-citing-labour-market-concerns/