RBA governor Lowe says rates to remain low for an extended period
Reserve Bank of Australia governor Lowe speaking before the House of Representatives' Standing Committee on Economics from prepared text
Some of the main points from the text:
- Australian economy to expand by 2-1/2 this year
- downward revision this year reflects weak consumption growth
- signs economy may have reached "gentle turning point"
- expecting qrtly GDP growth to increase gradually
- major uncertainty trade dispute between US and China
- we have a lot riding on these disputes being resolved
- central scenario for the unemployment rate to move lower to reach 5% again in 2021
- probable that we will still have spare capacity in the labour market for a while yet
- my view is that a further pick-up in wages growth is both affordable and desirable
- inflation still expected to pick up, but the date at which it is expected to be back at 2% has been pushed out again
- over 2020, inflation is forecast to be a little under 2% and over 2021 it is expected to be a little above 2%
- easier monetary policy mainly works through affecting exchange rate, disposable income
- having cut rates twice in quick succession thought appropriate to wait and assess developments
- reasonable to expect an extended period of low interest rates in Australia
- this reflects what is happening both overseas and here at home
- difficult to escape the fact that if global interest rates are low, they are going to be low here in Australia too
- RBA board is prepared to ease monetary policy further to meet inflation, employment goals
- monetary policy is not the country's only option
I bolded a few of those above, nothing surprising at all.
There will be Q&A to follow, which be more interesting
ps. The link to a live feed is here (scroll down a bit)
Full text of his prepared remarks here:
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And, also later the RBA will publish its latest quarterly Statement on Monetary Policy, at 0130GMT.
Reprinted from Forexlive，the copyright all reserved by the original author.
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