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MNI RBA Review - March 2023: Decisions To Be More Data Dependent

The RBA hiked rates 25bp to 3.6% at its March meeting, which brought it closer to pausing.

Central Bank ReviewHomepageRBA -ReviewCentral Bank ReportsMarkets

EXECUTIVE SUMMARY:

  • The RBA hiked rates 25bp to 3.6% at its March meeting, which brought it closer to pausing. RBA Governor Lowe reiterated this in his speech on Wednesday. The meeting statement was less hawkish than February's with the removal of rate "increases" and the addition of "when" to the phrase regarding the size and timing of further moves. This makes the Board more data dependent and allows for a pause to be followed by a further rate rise.
  • Governor Lowe was clear in his speech that inflation remains too high and that rates need to rise further. Upcoming data will be very important in determining the outcome of the April meeting. Another 25bp move is likely in April unless the data, especially on employment, are very disappointing. Whether there is a move in May is going to be highly dependent on Q1 CPI.

Click to view full review:

RBA Review - March 2023.pdf

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EXECUTIVE SUMMARY:

  • The RBA hiked rates 25bp to 3.6% at its March meeting, which brought it closer to pausing. RBA Governor Lowe reiterated this in his speech on Wednesday. The meeting statement was less hawkish than February's with the removal of rate "increases" and the addition of "when" to the phrase regarding the size and timing of further moves. This makes the Board more data dependent and allows for a pause to be followed by a further rate rise.
  • Governor Lowe was clear in his speech that inflation remains too high and that rates need to rise further. Upcoming data will be very important in determining the outcome of the April meeting. Another 25bp move is likely in April unless the data, especially on employment, are very disappointing. Whether there is a move in May is going to be highly dependent on Q1 CPI.

Click to view full review:

RBA Review - March 2023.pdf