Australia: RBA kept the steady hand this week – UOB

Lee Sue Ann, Economist at UOB Group, reviews the latest RBA event (March 1).

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%. There were little or no surprises in today’s accompanying statement.”

“The impact of the Russia-Ukraine crisis is a major risk factor to global commodities and energy markets, as well as ongoing supply-side problems, which could lead to sharp price adjustments. Continued out-performance of the labour market amid a steady rise in wage growth, and further increases in inflation could prompt a more rapid normalisation of monetary policy settings.”

“Inflation prints for the March and June quarters, which will be due on April 27 and July 27, respectively, will be closely eyed. Until then, we still look for the first rate hike in 2023, though we will be keenly watching for any major adjustment in the RBA’s rhetoric. The next RBA meeting is on 5 Apr.”