Tuesday, 15 June, 2021

RBA Minutes

Considerations for monetary policy
The meat of any central bank minutes usually comes at the end, with the “Considerations for monetary policy” section. That is certainly true for the RBA minutes, so we will start with that section before moving back to see what else is noteworthy.
And the main conclusion expressed in the latest policy-relevant section of these minutes was to push all of the important decisions back to the July meeting, where the RBA board would consider:
  • “…whether to retain the April 2024 bond as the target bond or extend the target to the next maturity, the November 2024 bond” and also;
  • “…the Board would decide upon future government bond purchases at the July meeting ahead of the completion of the second $100 billion of purchases in early September 2021″.
The options for the bond purchase program were outlined as:
  1. “Ceasing purchasing bonds in September (other than to support the yield target if necessary)” – thought likely to be premature – so we can probably rule this one out..
  2. “Repeating $100 billion of purchases for another 6 months“;
  3. “Scaling back the amount purchased or spreading the purchases over a longer period” and;
  4. “Moving to an approach where the pace of the bond purchases is reviewed more frequently, based on the flow of data and the economic outlook” (this sounds pragmatic, but has the disadvantage of being fiddly – central banks usually like simplicity and transparency).

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