RBA no longer withdrawing “extraordinary” support – ANZ

Analysts at Australia and New Zealand (ANZ) banking group offer their afterthoughts on the Reserve Bank of Australia’s (RBA) expected 50 bps rate hike decision.

Key quotes

“The RBA tightened by 50bp at its August meeting. The key change from July is that there is no longer any reference to the withdrawal of “extraordinary [our emphasis] monetary support”.”

“This could be a signal that the RBA Board may be thinking about reducing the size of the monthly increases to 25bp in September. We think a 50bp increase is still the most likely choice.”

“The RBA’s updated forecasts have inflation peaking at 7¾% and only dropping to “around” 3% through 2024. This is despite growth slowing below 2% in 2023 and 2024. We will be very interested to see what interest rate assumption is part of that forecast mix.”

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