Australia Central Bank Sees Faster Economic Recovery From Pandemic

The Reserve Bank of Australia’s minutes from its April meeting has been released. Here are the main quotes.

The minutes of the latest RBA meeting emphasized that the economic recovery has further to run before the RBA will be satisfied which supports our view that the Bank will announce another extension to its QE program in June.

Board members discussed the house price increase and were briefed on the RBA’s regular half-yearly assessment of financial stability risk which was published on Apr 9.

Preliminary data suggests March quarter Gross Domestic Product was likely to have recovered further to around pre-pandemic level, earlier than previously expected.

Board would maintain “highly supportive” monetary conditions until employment, inflation goals were achieved.

Does not expect to reach targets for unemployment, inflation until 2024 at the earliest.

Demand for new business loans remained subdued.

Will not raise cash rate until actual inflation is sustainably in 2-3% target band.

AUD has depreciated from recent highs to be back around levels at the turn of the year

Board prepared to undertake further bond purchases, beyond a$200 bln announced, if it would assist with progress towards its goals.

Would consider extending low-cost funding facility for banks if there were marked deterioration in funding and credit conditions. no such signs currently.