Economist at UOB Group Lee Sue Ann reviews the latest RBA monetary policy meeting (March 5).
Key Takeaways
“The Reserve Bank of Australia (RBA), at its meeting today, decided to maintain the cash rate target at 0.10% and the interest rate on Exchange Settlement balances at 0%. However, the RBA removed its usual reference that the Board is willing to be “patient’.”
“The mention of additional evidence refers specifically to 1Q22 and 2Q22 CPI data on 27 Apr and 27 Jul, respectively, as well as 1Q22 wages data on 18 May. An election in May lies in between now and then, reinforcing the view that a pre-election rate rise is unlikely.”
“We had already brought forward our rate hike call, looking for the cash rate target to be lifted by 15bps in Aug and then by 25bps in Nov. We are maintaining that view, for now, though bearing in mind that a much higher-than-expected core CPI could increase the risks of a rate hike sooner than Aug. The next RBA meeting is on 5 Apr.”
