So, the Reserve Bank of Australia’s minutes are out and it looks like further easing down under won’t be happening anytime soon. In fact, there’s isn’t even any mention of it.
What did get mentioned though were Greece and China, saying that while Greece’s “OXI” vote would have had severe repercussions for the Greeks themselves, “the direct economic implications for the global economy and Australia were assessed by members to be relatively limited.”
As for China – whose downturn is one of the main drivers of the Aussie’s current downtrend – this is all they had to say:
In China, there had been little change in the monthly indicators of economic activity, although conditions had been a bit more positive in some sectors than early in 2015. The Chinese property market had improved somewhat; residential property prices overall had risen for the first time in a year and floor space sold had increased in the past few months. Members reflected that the recent easing in monetary conditions would provide additional support to the property market and growth more broadly, although it could be some time before a significant pick-up in construction activity began. Recent efforts by central government authorities to increase infrastructure investment further and reform local government financing arrangements were also expected to support investment.
On the Aussie, they think it’s still a little too high, saying:
Although the exchange rate against the US dollar was close to levels last seen in 2009, the decline in the Australian dollar had been more modest in terms of a basket of currencies. Members noted that the exchange rate had thus far offered less assistance than would normally be expected in achieving balanced growth in the economy and that further depreciation seemed both likely and necessary.
AUD/USD promptly fell after the minutes’ release.
Photo credit: Vera & Jean-Christophe via Flickr