MNI RBA Review - March 2021: Maintaining Optionality

• The Reserve Bank of Australia (RBA) held its monetary policy settings steady at the end of its March meeting, matching broader expectations, while affirming its existing forward guidance, also matching broader expectations.
• Ultimately, the RBA is looking to maintain optionality re: its bond buying scheme and the potential extension of its 3-Year yield targeting mechanism, while attempting to assure the market that it is ready to do what is needed to ensure the required financial conditions are in place to support the economy post-COVID.
• The Bank continued to express some caveated and indeed cautious optimism re: the prospects of a more drawn out economic recovery, tipping its hat to the continued economic outperformance at home while flagging positives overseas, although downside risks to the economic outlook quite predictably remain evident.
• There will be several opportunities to firm up the understanding of RBA policy over next 2 weeks or so, initially via the minutes of the March meeting, while Governor Lowe is set to make 2 appearances over that horizon.

Please use the following link to access the full review:

RBA Review - March 2021.pdf