With the release of the RBA minutes coming so soon after the Statement on Monetary Policy (SOMP) and recent speeches by two deputy governors, commentators and analysts did not expect anything new to be revealed. Instead they were focused on changes in tone and any variations from the July minutes.
As with the July minutes, the RBA’s forward view would be data-dependent. But differences emerged in the comments on the exchange rate where the currency’s depreciation was now assisting the economy’s transition, thus ceasing the need for the RBA to talk the currency down. Business conditions were also seen in a more positive light: “business conditions were clearly above average”. The unemployment rate was assessed as likely to have stabilised, which the SoMP had explained was the result of lower net immigration and low wages inflation.
Westpac said the August minutes reveal an unchanged stance on policy, an RBA which finds the current level of the dollar acceptable and a generally more positive view on the economic outlook. A subdued level of growth (2.5%) for 2015/2016 is offset by the Bank’s forecast for robust growth in 2016/2017 this year. “Accordingly we maintain our call that rates will remain on hold over the course of 2015 and 2016.” ANZ was more circumspect in its reading of the minutes. It agreed the minutes were more positive but it thought the RBA still has an easing bias.