Latest monetary policy decision by the RBA - 6 July 2021
- Prior 0.10%
- 3-year bond yields target 0.10%
- Retains April 2024 bond as bond yields target
- To continue with bond purchases after completion of program in early September
- Australian economic recovery is stronger than earlier expected
- Outlook for investments, households generally in good shape
- Labour market has continued to recover faster than expected
- Inflation and wages remain subdued
- Will respond to improved outlook by adjusting weekly amount of bonds purchased
- Will conduct further review in November
- Central scenario remains for optimal conditions unlikely to be met by 2024
- Full statement
The key takeaway from this is that the RBA is planning another round of bond purchases beyond the completion date in September, though they do acknowledge the improved economic conditions and say that they will reevaluate things in November.
So, if anything, that is when we might expect any major change to the outlook and policy steps by the RBA moving forward.
The rest of the language remains more or less the same as they still view inflation and wages being as more subdued, with conditions unlikely to warrant a liftoff in the cash rate until 2024 at the earlier - at least their view for now.
AUD/USD keeps largely steady around 0.7555-65 after the decision.
