At the July Reserve Bank of Australia monetary policy board meeting the Bank cut interest rates.
- Following the cut in the previous month.
Highlights from the minutes of the July meeting:
- board to adjust policy "if needed" to support growth
- board to monitor labour market closely, improvement needed to spur wage growth
- spare capacity likely to remain in labour market for "some time"
- lower rates to keep AUD lower than would otherwise be the case
- lower borrowing costs to free up cash for consumer spending
- Board recognised uneven effect of lower rates on different households
- extent of spare capacity meant rate cut unlikely to lead to risky rise in borrowing
- labour demand being met by rise in participation, rather than fall in unemployment rate
- board saw prospects of lift in household income, support from tax rebates
- signs of stabilisation in Sydney, Melbourne housing markets
- funding costs for major Australian banks had reached historic low
- retail data suggested discretionary spending remained soft in Q2
- RBA board had detailed discussion on retail competition, impact on inflation
- board noted significant change in outlook for monetary easing globally, esp US
- risks from trade disputes remained high, inflation subdued in developed world
Full text of the minutes:
more to come
