The Reserve Bank of Australia meeting was 2 weeks ago and already the globale economy has moved on in a big way (and not a positive way … altho9ugh at least China is on the up - important for Australia). Anyway, on with the minutes FWIW!
- board prepared to ease monetary policy further to support economy
- to ensure Australian financial system has sufficient liquidity
- board agreed importance of maintaining contact to assess impact of coronavirus
- extended period of low rates would be required
- board agreed coronavirus to have significant effect on economy
- very unlikely virus would be contained in near future
- Q1 growth to be noticeably weaker than expected, hard to predict length of slowdown
- board welcomed government action on fiscal stimulus, combined policy response to help
- rate cut would work via lower AUD, boosting cash flows to mortgage holders
- board judged risks of borrowing bubble not particularly high
- virus impact on tourism and education alone to cut Q1 GDP by 0.5ppt
- increasingly clear virus to cause major disruptions around the world
- noted steep falls in risky assets, hard to price risk given unprecedented event
Headlines via Reuters
You'll recall Bank at this meeting the Bank cut the cash rate by 25bps. Which, in the light of what the RBNZ and Fed have done (two name only two) seems timid. I often mention 'timid' in my posts on the RBA. While I was confident the Fed would cut on an emergency basis aheadof their scheduled meeting (and posted so a few times) I think the RBA is probably too shy to move ahead of their April meeting. Scheduled for the 7th. # weeks away … in this environment that is a LONG time.
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