Reserve Bank of Australia
– Banyan Tree Research
In the past week, the Reserve Bank of Australia decided to:
(1) maintain the cash rate target at 10bps and interest rate on Exchange Settlement balances of zero percent;
(2) maintain the target of 10 basis points for the April 2024 Australian Government bond;
(3) purchase government securities at the rate of $4bn a week and to continue the purchases at this rate until at least mid-February 2022.
The RBA also highlighted “the Board is committed to maintaining highly supportive monetary conditions to achieve a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2 to 3% target range. The central scenario for the economy is that this condition will not be met before 2024. Meeting this condition will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently”. In managing portfolios, we continue to monitor key Australian Macro Indicators and as per Figure 1, we reproduce current consensus forecasts.