RBA announces their latest monetary policy decision – 7 July 2020
- Prior 0.25%
- Will maintain acommodative approach for as long as needed
- Will not increase cash rate target until progress is made on employment, inflation
- Maintains 0.25% target on 3-year bond yields
- Reaffirms to scale up bond purchases again if needed
- Fiscal, monetary support likely will be required for some time
- Uncertainty about health situation is making many households, businesses cautious
- Economic conditions have stabilised recently
- The downturn has been less severe than earlier expected
- Economy is still going through a ‘very difficult period’
- The global outlook remains uncertain
Pretty much a relative non-event here as the RBA maintains a similar language for the most part in its statement.
Their take on the economy has changed a little to put more emphasis about the health situation and future strength of the economy, but in general it is little different from the outlook seen in the June meeting last month.
They also make mention that economic conditions aren’t as bad as previously anticipated but in order to keep more accommodative policy in place, they are alluding to the uncertainty that still beckons; no doubt the recent spike in Victoria cases comes to mind.
More importantly, they don’t make any mention to the aussie exchange rate once again. So, that means they’re not exactly fighting back too strongly against the currency with AUD/USD having traded close to 0.7000 for the past month or so.
The aussie is little changed on the day with AUD/USD at 0.6967 currently.
