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The current stance on monetary policy is driving sustainable growth and low inflation but scope remains to lower the cash rate further if necessary, the RBA’s June Monetary Policy Meeting minutes, released yesterday, have revealed.
While the Australian economy continues to lag, the RBA board agreed at its monetary policy meeting earlier this month that recent information had not led to any downward revision to the outlook of the economy, but if anything “some indicators had been on the stronger side”.
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The release of the minutes reiterated the central bank’s expectations for a gradual expansion to take place later in the year, with indications that monetary and fiscal policies are working to support demand.
Should it be necessary to stimulate growth down the track, leaving the rate at 3 per cent would allow for adequate room to move, the bank decided.
“Members judged that maintaining the current stance of monetary policy for the time being would be consistent with fostering sustainable growth and low inflation, and would leave adequate flexibility to respond to developments as needed over the period ahead,” the minutes read.
