Cash rate -
* The Reserve Bank of Australia (RBA) has decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero percent.
* The RBA will cease further purchases under the bond purchase program, with the final purchases scheduled for 10 February.
Employment -
* The labor market has recovered strongly, with the unemployment rate declining to 4.2 percent in December.
* High job vacancy numbers suggest further employment gains in the coming months.
* The RBA's central forecast predicts a fall in the unemployment rate to below 4 percent later this year and around 3¾ percent by the end of 2023.
Wages -
* Wages growth has picked up but remains at relatively low rates seen before the pandemic.
* Gradual further pick-up in wages growth is expected as the labor market tightens, although there is uncertainty about wages behavior at historically low unemployment levels.
Inflation -
* Inflation has increased more quickly than expected but remains lower compared to many other countries.
* Headline CPI inflation is 3.5 percent, influenced by higher petrol prices, prices for newly constructed homes, and disruptions to global supply chains.
* Underlying inflation is at 2.6 percent, with the central forecast anticipating an increase to around 3¼ percent in the coming quarters, followed by a decline to around 2¾ percent in 2023 as supply-side issues are resolved.
Housing -
* Housing prices have risen strongly, though the rate of increase has eased in some cities.
* Maintaining lending standards and ensuring borrowers have adequate buffers is crucial given historically low interest rates.
Economic Outlook -
* The Australian economy remains resilient despite the impact of the Omicron outbreak.
* GDP growth of approximately 4¼ percent in 2022 and 2 percent in 2023 is expected, supported by sound household and business balance sheets, increased business investment, a pipeline of construction work, and favorable macroeconomic policies.
* Uncertainty mainly stems from the ongoing pandemic and its effects.
Other -
* Financial conditions in Australia continue to be highly accommodative.
* Ending the bond purchase program is based on a review of actions by other central banks, Australia's bond market functioning, and progress towards employment and inflation targets.
* The RBA will consider reinvestment of future bond proceeds at a later meeting.
* The Board remains committed to maintaining supportive monetary conditions until full employment and inflation within the target range are achieved.
* Ceasing bond purchases does not imply an immediate increase in interest rates, as inflation sustainability and modest wages growth are still factors to be monitored.
Cash rate -
* The Board decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero percent.
Employment -
* The Australian economy shows resilience with a low unemployment rate of 4.2 percent, the lowest in 14 years.
* Hours worked declined, but the decline in infection rates and high job vacancies suggest a strong bounce-back in employment.
Wages -
* Wages growth has picked up but remains relatively low compared to 2020
* Further gradual pick-up in wages growth is expected as the labor market tightens, although uncertainty remains.
Inflation -
* Inflation has increased faster than expected but remains lower than in many other countries.
* Central forecast indicates underlying inflation to increase further before declining as supply-side problems resolve and consumption patterns normalize.
* Uncertainty arises from disruptions to supply chains and global energy market developments.
Housing -
* Housing prices have risen strongly, although the rate of increase has eased in some cities.
* It is important to maintain lending standards and ensure borrowers have adequate buffers.
Economic outlook -
* The global economy is recovering, but the challenges in Europe introduce otheruncertainty.
* The Australian economy is resilient, with spending picking up following the setback starting in 2020 .
* Macroeconomic policy settings support growth, with good household and business balance sheets and an upswing in business investment.
Other -
* Financial conditions in Australia remain highly accommodative, with low interest rates and a low Australian dollar exchange rate.
* The Board is committed to maintaining highly supportive monetary conditions to achieve full employment and inflation consistent with the target.
* The Board will monitor factors affecting inflation and employment before considering any changes to the cash rate.
Cash rate -
* The Board decided to maintain the cash rate target at 10 basis points.
* The interest rate on Exchange Settlement balances remains at zero per cent.
* Financial conditions in Australia continue to be highly accommodative.
Employment -
* The Australian economy remains resilient, and spending is picking up after the Omicron setback.
* The unemployment rate has fallen further to 4 per cent in February.
* Job vacancies and job ads are at high levels, indicating strong growth in employment.
Wages -
* Wages growth has picked up, but at the aggregate level, it is still relatively low.
* Some areas are experiencing larger wage increases.
* With the tight labor market, a gradual pick-up in wages growth is expected.
Housing -
* Housing prices have risen strongly over the past year, although some markets have eased recently.
* It is crucial to maintain lending standards and ensure borrowers have adequate buffers.
Economic outlook -
* The Australian economy remains resilient, with good shape household and business balance sheets.
* Business investment is on the rise, and there is a significant pipeline of construction work.
* Macroeconomic policy settings continue to support growth.
* Inflation has increased, but it remains lower than in many other countries.
* Uncertainties exist regarding supply-side issues, global energy markets, and overall labor costs.
Other -
* Bond yields have risen due to increased inflation and expectations of future policy interest rates.
* Rising prices are putting pressure on household budgets, and floods are causing hardship in some communities.
* The Board will assess incoming information to set policies supporting full employment and inflation targets.
Cash rate -
* The Board has increased the cash rate target by 25 basis points to 35 basis points, signaling a shift towards normalizing monetary conditions.
Employment -
* The Australian economy has shown resilience, with the unemployment rate declining to 4% and labor force participation reaching a record high.
* Job vacancies and job ads are at high levels, indicating strong growth in employment.
* The central forecast predicts a decline in the unemployment rate to around 3½% by early 2023, the lowest rate in almost 50 years.
Wages -
* There is evidence of wages growth picking up, especially in a tight labor market where firms are offering higher wages to attract and retain staff.
* Aggregate wages growth had been subdued during 2021 but is now showing signs of improvement.
Inflation -
* Inflation has increased more quickly and to a higher level than expected, although it remains lower than in most other advanced economies. * Headline inflation was 5.1% and underlying inflation was 3.7% over the year to the March quarter.
* Domestic capacity constraints and global factors have contributed to the rise in inflation. Inflation pressures have broadened, with firms passing through cost increases to consumer prices.
* A further rise in inflation is expected in the near term, but it is forecasted to decline back towards the target range of 2 to 3% as supply-side disruptions are resolved.
Housing -
* The Australian economy has seen positive growth, with household and business balance sheets in good shape.
* Business investment is increasing, and there is a large pipeline of construction work.
* Housing prices have risen strongly over the past year, although some markets have eased recently.
Economic outlook -
* The economic outlook for Australia remains positive, but uncertainties persist due to ongoing disruptions from the pandemic, challenges in Europe, and declining consumer purchasing power from higher inflation.
* The central forecast predicts GDP growth of 4¼% in 2022 and 2% in 2023, supported by macroeconomic policy settings and higher commodity prices.
Cash rate -
* The Board has decided to increase the cash rate target by 50 basis points, signaling a shift in monetary policy.
Wages -
* Wages growth is expected to pick up as firms compete for staff in a tight labor market.
Housing -
* Housing prices have experienced declines in some markets but remain higher than pre-pandemic levels, supporting household wealth and spending.
* The household saving rate remains higher than pre-pandemic levels, and many households have built up financial buffers.
Inflation -
* Inflation in Australia has experienced a significant increase, surpassing earlier expectations.
* Global factors, including supply chain disruptions and the war in Ukraine, contribute to rising inflation.
* Domestic factors such as capacity constraints and a tight labor market also contribute to upward price pressures.
* Inflation is expected to rise further in the near term but is projected to moderate back to the target range of 2-3% next year.
Economic Outlook -
* The Australian economy demonstrates resilience, with positive growth and strong household and business balance sheets.
* Business investment is on an upswing, and there is a substantial pipeline of construction work.
* Macroeconomic policies support growth, and higher commodity prices contribute to national income.
* The labor market is strong, with significant employment growth and a low unemployment rate.
Cash rate -
* The Board increased the cash rate target by 50 basis points to 1.35%, signaling a tightening of monetary policy.
* The increase in interest rates is part of the ongoing withdrawal of extraordinary monetary support implemented during the pandemic.
Employment -
* Australia's labor market is robust, with the unemployment rate at a historic low of 3.9%, the lowest in almost 50 years.
* Job vacancies and job ads are at high levels, indicating strong demand for workers.
* Underemployment has decreased significantly, and further declines in unemployment and underemployment are expected.
Wages -
* There is evidence of a lift in wages growth as firms compete for staff in the tight labor market.
* The Bank's business liaison program and surveys indicate an increase in wages after a period of low rates in recent years.
Inflation -
* Global inflation is high due to disruptions in supply chains, the war in Europe, and strong demand.
* Inflation in Australia is also elevated but not as high as in other countries.
* Factors such as strong demand, tight labor market, capacity constraints, and floods are contributing to upward pressure on prices.
* Inflation is expected to peak this year and then decline toward the 2-3% target range next year.
* Higher interest rates will help establish a more sustainable balance between supply and demand.
* The Board is committed to ensuring that inflation returns to the target range over time and will take necessary measures accordingly.
Housing -
* Housing prices have declined in some markets after significant increases in recent years.
* Household budgets are under pressure from higher prices and interest rates.
* The household saving rate remains higher than pre-pandemic levels, and many households have built up financial buffers.
Economic outlook -
* The Australian economy remains resilient, growing by 0.8% in the March quarter and 3.3% over the year.
* Macroeconomic policy settings are supportive of growth, and national income is boosted by higher commodity prices.
* Uncertainties in the global outlook persist due to the war in Europe, energy, and agricultural commodity prices.
* The Board will closely monitor these factors in assessing the appropriate monetary policy settings.
Cash rate -
* The Board increased the cash rate target by 50 basis points to 1.85 percent.
* The increase in interest rates is part of the process of normalizing monetary conditions in Australia.
Employment -
* The labor market in Australia remains tight, with the unemployment rate reaching a record low of 3.5 percent.
* Job vacancies and job ads are at high levels, indicating strong employment growth.
* Wages growth is expected to increase as firms compete for staff in the tight labor market.
Wages -
* The Board anticipates a lift in wages growth from the low rates of recent years due to tight labor market conditions.
Inflation -
* Inflation in Australia is at its highest level since the early 1990s, with headline inflation at 6.1 percent and underlying inflation at 4.9 percent.
* Global factors, along with strong demand, tight labor market, and capacity constraints, contribute to upward pressure on prices.
* Inflation is expected to peak later this year and then decline back toward the 2-3 percent range.
Housing -
* Housing prices are declining in some markets after significant increases in recent years.
* Higher inflation and interest rates are putting pressure on household budgets.
Economic outlook -
* The Australian economy is expected to continue growing strongly, with employment and consumer spending showing resilience.
* GDP growth is forecasted to be 3.25 percent in 2022, followed by 1.75 percent in the subsequent two years.
* The central forecast indicates a decline in economic growth pace in the future.
Cash rate -
* The Board has increased the cash rate target by 50 basis points to 2.35 percent.
* The interest rate on Exchange Settlement balances has also been raised by 50 basis points to 2.25 percent.
Employment -
* The Australian economy is experiencing solid growth, and the unemployment rate has reached its lowest level in almost 50 years, declining to 3.4 percent in July.
* Job vacancies and job ads are at high levels, indicating a further decline in the unemployment rate in the coming months.
* However, some increase in the unemployment rate is expected as economic growth slows.
Wages -
* Wages growth has picked up from the low rates of recent years, and certain sectors are experiencing brisk increases in labor costs.
The tight labor market and upstream price pressures will continue to be closely monitored by the Board.
Inflation -
* Inflation in Australia is currently at its highest level since the early 1990s and is expected to further increase in the near future.
* Global factors and domestic factors, such as strong demand, a tight labor market, and capacity constraints, are contributing to upward pressure on prices.
* Inflation is projected to peak later this year and then decline back towards the 2–3 percent range due to the resolution of global supply-side problems, commodity price stabilization, and the impact of rising interest rates.
Housing -
* Higher inflation and interest rates are impacting household budgets, and housing prices have started declining in most markets after previous significant increases.
* However, people are finding jobs, working more hours, and receiving higher wages, while many households have built up substantial financial buffers.
Economic outlook -
* The outlook for global economic growth has deteriorated due to various factors, including high inflation, tightening monetary policies in most countries + geopolitical tensions.
* The Australian economy remains resilient, with solid growth and boosted national income from record-high terms of trade.
* The Board expects to increase interest rates further in the coming months to bring inflation back to target and achieve a sustainable balance of demand and supply.
Other -
* Consumer confidence has fallen, and the behavior of household spending continues to be uncertain.
Cash rate -
* The Board increased the cash rate target by 25 basis points to 2.60%.
* Reflecting the outlook for inflation and economic growth, the decision was made to raise the cash rate.
Employment -
* The Australian economy continues to grow solidly, leading to a tight labor market.
* Unemployment rate in August was 3.5%, one of the lowest rates in almost 50 years.
* Job vacancies and job ads are at high levels, indicating a potential decline in the unemployment rate.
Wages -
* Wages growth is gradually picking up from previous low rates.
* The Board closely monitors the evolution of labor costs and price-setting behavior of firms.
Inflation -
* Inflation in Australia is high, driven by global factors and strong domestic demand.
* Further inflation increase is expected before moderating back to the 2-3% range. (The Board remains committed to returning inflation to the 2-3% target range.)
* Medium-term inflation expectations remain stable, which is important for economic stability.
Housing -
* Higher inflation and interest rates are impacting household budgets.
* Consumer confidence has declined, and housing prices are decreasing after previous increases.
* However, people are finding jobs, working more hours, and receiving higher wages.
Economic outlook -
* The Australian economy is growing well, supported by record levels of the terms of trade.
* The Board aims to achieve price stability, strong economic growth, and sustained full employment.
* Uncertainty exists due to the global economic outlook and household spending response.
Cash rate -
* The Board decided to increase the cash rate target by 25 basis points to 2.85 percent.
* The size and timing of future interest rate increases will depend on incoming data and the outlook for inflation and the labor market.
Employment -
* The labor market remains tight, with low unemployment rates and high job vacancies. Many firms are facing difficulties in hiring workers.
Wages -
* Wages growth is picking up from recent lows, but it remains lower compared to other advanced economies.
* Further wage growth is expected due to the tight labor market and higher inflation.
Inflation -
* Inflation in Australia is currently high, with the CPI inflation rate reaching 7.3 percent, the highest in decades.
* Global factors and strong domestic demand contribute to this high inflation.
* Inflation is forecasted to increase further before declining due to global supply-side resolutions, commodity price declines, and slower demand growth.
* Medium-term inflation expectations are well anchored.
Housing -
* Housing prices have been declining following significant earlier increases.
* Higher interest rates and inflation are putting pressure on household budgets.
* Household spending and consumer confidence have been affected.
* The full effect of the increase in interest rates is yet to be felt in mortgage payments.
Economic outlook -
* The Australian economy continues to grow solidly, boosted by record-level terms of trade.
* Economic growth is expected to moderate due to a slowing global economy, declining spending on services, and tighter financial conditions. * GDP growth forecasted at around 3 percent this year and 1.5 percent in 2023 and 2024.
Cash rate -
* The Board has decided to increase the cash rate target by 25 basis points to 3.10 percent.
* The interest rate on Exchange Settlement balances has also been raised by 25 basis points to 3.00 percent
Employment -
* The labor market remains tight, making it challenging for firms to hire workers.
* The unemployment rate decreased to 3.4 percent in October, the lowest since 1974.
* Job vacancies and job ads are high, but have slightly declined recently.
* Wages growth is picking up due to the tight labor market and higher inflation.
Wages -
* Wages growth is continuing to pick up from the low rates of recent years.
* The tight labour market and higher inflation are expected to further contribute to the pick-up in wages.
* The Board is closely monitoring the evolution of labour costs and the price-setting behavior of firms to ensure a balanced prices-wages relationship and avoid a spiral of rising prices and wages.
Inflation -
* Inflation in Australia is high, reaching 6.9 percent over the year to October.
* Global factors and strong domestic demand contribute to this inflationary pressure.
* The goal is to achieve a sustainable balance between demand and supply to return inflation to target.
Housing -
* The impact of interest rate increases on mortgage payments is yet to be fully realized.
* Household spending is expected to slow down, but the timing and extent of the slowdown are uncertain.
* Housing prices have increased, and the Board aims to achieve a soft landing for the economy.
Economic outlook -
* The Australian economy continues to grow solidly, although growth is expected to moderate in the coming year.
* The slowdown is influenced by the global economic slowdown, the stabilization of spending on services, and tighter financial conditions.
* The Bank's central forecast projects growth of around 1.5 percent in 2023 and 2024.
The RBA cash rate is the benchmark interest rate for the Australian economy. It is the rate at which financial institutions lend and borrow money from each other in the overnight money market, and it is used as a reference point for setting other interest rates in the economy. Read more about the RBA cash rate here.
The RBA cash rate is announced on the first Tuesday of every month, except in January, The announcement is typically made at 2:30 PM Sydney time,
On a monthly basis, the Reserve Bank of Australia (RBA) convenes to assess the cash rate and determine if any adjustments are required. These meetings are scheduled ahead of time, with the precise dates and times announced in advance. Following each meeting, the RBA promptly discloses its decisions to the public.
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