Speaking at the post-monetary policy meeting press conference on Tuesday, the Reserve Bank of Australia (RBA) Governor Phillip Lowe said that “the condition for an increase in the cash rate depends upon the data, not the date.”
Additional quotes
“Condition for a lift in the cash rate relates to inflation, not wages.”
“Focus on wages does not mean we have a target for wages growth or that wages growth necessarily has to have cleared a specific benchmark before we adjust interest rates.”
“Still well short of our goals of full employment and inflation consistent with the target.”
“The central forecast was for inflation to just reach 2% by mid-2023.”
“This is the basis of our guidance that we do not expect the cash rate to be increased until 2024 at the earliest.”
“Want to emphasize that the step-down from $5 billion to A$4 billion does not represent a withdrawal of support by the RBA.”
Market reaction
In a delayed reaction to Lowe’s presser, AUD/USD jumps further to test the 0.7600 barrier. The spot is up 0.89% on the day.
Lowe’s justification of the paring back of the bond buys seems to boost the AUD bulls.