RBA minutes to press key policy messages

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)


The minutes of the Reserve Bank’s final board meeting of the year are not expected to contain any surprises after the central bank left its suite of policy measures unchanged this month.

But that won’t stop economists giving them the once over when they are released on Tuesday.

St George economists expect the minutes will continue to press the central bank’s three main messages.

Those messages are the Reserve Bank board will not increase the cash rate until actual inflation is sustainably within the two to three per cent target range, that that is not expected for at least three years, and that it is prepared to do more to stimulate the economy “if necessary”.

The central bank cut the cash rate and other key measures to a record low 0.1 per cent in November, while entering into $100 billion bond buying program over the next six months, aimed at keeping market interest rates low.

The board will not meet again until February 5.

Meanwhile, the Australian Bureau of Statistics will release its weekly payrolls data, a prelude to the official labour force figures on Thursday.

Economists expect a less spectacular 40,000 increase in the number of people employed during November after the surprising 178,800 surge in October.

That is expected to keep the unemployment rate at seven per cent, still shy of the spike to a 22-year high of 7.5 per cent seen in June and during the depths of the pandemic.

The Australian Chamber of Commerce and Industry-Westpac industrial trends survey for the December quarter is also released on Tuesday.

In the September quarter, its composite index improved to 42.8 points as manufacturing recovered from the initial hit of the pandemic, which saw the index tumble to just 24 points in the June quarter.

However, the sub-50 points index reading suggests manufacturing was still in contraction due to Victoria entering into a second lockdown. By November, the restrictions began to ease.


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