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20 Aug 2013
RBA minutes: Not imminent intention to reduce rates further?
FXstreet.com (Barcelona) - The minutes from the RBA’s 6 Aug meeting provided reason to feel less dovish towards the central bank, with speculation about an end of the easing cycle sound slightly more legitimate based on today's release.
The RBA said: "On balance, with growth expected to remain below trend for longer and inflation to remain within the target even with the effects of a lower exchange rate, members concluded that a lower level of the cash rate would better contribute to achieving sustainable growth in demand consistent with the inflation target."
RBA added: "Regarding the communication of this decision, members agreed that the Bank should neither close off the possibility of reducing rates further, nor signal an imminent intention to reduce rates further."
The key line the market is pricing in favour of the AUD 'no imminent intension to cut rates'. Additionally, the RBA added "would jusge policy in months ahead on data; path of the $A would be important."
The minutes follow the RBA's Statement of Monetary Policy released Aug 9, which saw the AUD rally after the line ""inflation outlook may provide some scope for further easing…” was omitted from the release.
The RBA said: "On balance, with growth expected to remain below trend for longer and inflation to remain within the target even with the effects of a lower exchange rate, members concluded that a lower level of the cash rate would better contribute to achieving sustainable growth in demand consistent with the inflation target."
RBA added: "Regarding the communication of this decision, members agreed that the Bank should neither close off the possibility of reducing rates further, nor signal an imminent intention to reduce rates further."
The key line the market is pricing in favour of the AUD 'no imminent intension to cut rates'. Additionally, the RBA added "would jusge policy in months ahead on data; path of the $A would be important."
The minutes follow the RBA's Statement of Monetary Policy released Aug 9, which saw the AUD rally after the line ""inflation outlook may provide some scope for further easing…” was omitted from the release.