The Reserve Bank of Australia (RBA), as stated by Assistant Governor Christopher Kent, is set to adopt an ample reserves system for monetary policy implementation. This new approach, similar to systems used by the European Central Bank, the Bank of England, and the Riksbank, involves adjusting the supply of reserves to meet demand changes, possibly through the purchase of short-dated government bonds and/or foreign exchange swaps. Despite the shift, Kent emphasized that this decision does not imply changes to the RBA's monetary policy stance or its approach to quantitative tightening. Amidst this policy shift, the RBA acknowledges an uncertain economic and inflation outlook, with risks appearing broadly balanced. The minutes from the RBA's recent meeting highlighted a consensus to keep rates unchanged, noting the economy's gap between demand and supply is closing quickly, yet it would take time for inflation to confidently return to target. Wage growth, although possibly at its peak, is not expected to decline rapidly. The RBA also noted that while upside risks to inflation have not materialized, consumer spending remains very weak, and the labor market is slightly tighter than what would be consistent with the inflation target.
RBA: Members Agreed Appropriate To Leave Rates Unchanged At Meeting - Minutes - No Mention Of Board Considering Option To Raise Rates - Board Agreed It Was Difficult To Either Rule In Or Out Future Changes In Cash Rate - Economic Outlook Uncertain, Risks Seemed Broadly Balanced…
RBA: WAGE GROWTH MAY HAVE PEAKED, BUT NOT EXPECTED TO DECLINE QUICKLY
RBA: LABOUR MARKET A LITTLE TIGHTER THAN CONSISTENT WITH INFLATION AT TARGET
RBA: GAP BETWEEN DEMAND AND SUPPLY IN ECONOMY "CLOSING RELATIVELY QUICKLY"
RBA: INFLATION HIGH BUT GRADUALLY RETURNING TOWARD TARGET, LABOUR MARKET EASING
RBA: UPSIDE RISKS TO INFLATION HAD NOT YET MATERIALISED, WHILE CONSUMPTION WAS VERY WEAK
RBA: WOULD TAKE "SOME TIME" BEFORE BOARD COULD BE CONFIDENT INFLATION RETURNING TO TARGET
RBA: ECONOMIC OUTLOOK UNCERTAIN BUT RISKS SEEMED BROADLY BALANCED
RBA: NO MENTION IN MINUTES THAT BOARD CONSIDERED OPTION TO RAISE RATES
RESERVE BANK OF AUSTRALIA MINUTES: MEMBERS AGREED APPROPRIATE TO LEAVE RATES UNCHANGED AT MEETING
The Reserve Bank of Australia will switch to a new system for the implementation of monetary policy, Assistant Governor Christopher Kent said https://t.co/Fra4V6jM3o
RBA’S KENT: OUTLOOK FOR INFLATION AND MONPOL IS UNCERTAIN
🔴 RBA ASSISTANT GOV KENT: UNCERTAINTY SURROUNDS INFLATION AND POLICY OUTLOOK
RBA’s Kent: RBA To Adopt Ample Reserves System To Implement MonPol - Ample Reserves System Similar To ECB, BoE, Riksbank - Decision Doesn’t Have Implications For MonPol Stance, Approach To QT https://t.co/Tq3ha925mJ
RBA'S KENT: SUPPLY OF RESERVES CAN RISE AND FALL IN LINE WITH CHANGES IN DEMAND || SAYS RBA COULD ALSO SUPPLY RESERVES VIA PURCHASES OF SHORT-DATED GOVERNMENT BONDS AND/OR FX SWAPS
RESERVE BANK OF AUSTRALIA ASSISTANT GOV KENT: RBA TO ADOPT AN AMPLE RESERVES SYSTEM FOR MONETARY POLICY