17 Mar 2015
RBA on track to cut rate over coming months - ANZ
FXStreet (Bali) - The RBA remains on track to cut the cash rate another 25bp over the coming months, notes Felicity Emmett, Co-Head of Australian Economics at ANZ.
Key Quotes
"Today’s minutes from the March meeting suggest that the RBA remains on track to cut the cash rate another 25bp over the coming months. We expect April is the most likely timing."
"The minutes repeated the Bank’s key signalling language, noting that “members judged it appropriate to hold the cash rate steady for the time being, while recognising that further easing over the period ahead may be appropriate to foster sustainable growth in demand while maintaining inflation consistent with the target”. As we’ve highlighted previously, history shows that the Bank uses this language just prior to changing the cash rate. Over the past six years, they have used the phrase “time being” five times, and in each case the Bank has moved the cash rate the following month."
"Moreover, the Bank has a tendency to move in fairly quick succession in the early part of a cycle given that the impact of one 25bp rate cut on the economy is very small."
Key Quotes
"Today’s minutes from the March meeting suggest that the RBA remains on track to cut the cash rate another 25bp over the coming months. We expect April is the most likely timing."
"The minutes repeated the Bank’s key signalling language, noting that “members judged it appropriate to hold the cash rate steady for the time being, while recognising that further easing over the period ahead may be appropriate to foster sustainable growth in demand while maintaining inflation consistent with the target”. As we’ve highlighted previously, history shows that the Bank uses this language just prior to changing the cash rate. Over the past six years, they have used the phrase “time being” five times, and in each case the Bank has moved the cash rate the following month."
"Moreover, the Bank has a tendency to move in fairly quick succession in the early part of a cycle given that the impact of one 25bp rate cut on the economy is very small."