Tuesday, 18 July 2017 09:05 WIB | FISCAL & MONETARY |MoneterRBA
Australia's central bank signaled it isn™t ready to join global counterparts in unwinding policy stimulus as the outlook for property and employment Down Under remain clouded.
"Members regarded the improvement in the world economy over the preceding months as a welcome development," the Reserve Bank of Australia said in minutes of its July meeting Tuesday. "Nevertheless, they assessed that current economic conditions in Australia, and the outlook for growth and inflation, meant that developments in the labor and housing markets continued to warrant careful monitoring."
The RBA has kept interest rates at a record-low 1.5 percent since August as it tries to smooth the economy's transition away from mining investment-led growth. The cheap cash has sent house prices soaring in Sydney and Melbourne, while also encouraging residential construction that™s employed many former miners.
Australia's jobless rate has fallen to 5.5 percent, though under-employment remains high, prompting the RBA to note the stronger labor market removes œsome of the downside risk to its wage-growth forecasts. A complication, however, is a currency that has climbed more than 4 U.S. cents since early May, tightening conditions for exporters like tourism and education that are key to supporting growth.
The minutes noted the Aussie dollar has "appreciated somewhat" since the June meeting, adding that this was consistent with "slightly better-than-expected domestic economic news." It added that the currency had remained in the narrow range of the prior year or so.
The RBA reiterated its regular line that "an appreciating exchange rate would complicate" the economy's adjustment from the mining investment boom.