Free Trial

Late Corporate Credit Update


Bear Threat Remains Present


Bear Flag Formation

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
MNI (Sydney)

The Reserve Bank of Australian is maintaining its dovish policy outlook with wages growth now the key to driving official interest rates up from their record low of 0.10%.

The RBA Board On Tuesday, as expected, left rates on hold, with a May review scheduled on how to unwind the central bank’s AUD350 billion portfolio of bonds purchased under its programme of quantitative easing which ended in February, see: MNI BRIEF: RBA Says Inflation Lags On Wages As Rates On Hold.


Although trimmed mean inflation is at 2.6%, and in the middle of the RBA’s 2% to 3% range for the first time in around seven years, the RBA is still unconvinced about the sustainability of price gains given that wages growth remains at a sluggish 2.3%.

“It is likely to be some time yet before growth labour costs are at a rate consistent with inflation being sustainably at target,” today’s RBA statement said.

“While inflation has picked up, it is too early to conclude that it is sustainably within the target range.”


Other economic indicators are bullish. Employment is at a 14-year-low of 4.2% and the RBA is forecasting it will fall below 4% later in the year.

Growth data will be released for the fourth quarter on Wednesday and is expected to show the economy expanding at 3% after turning negative amid the pandemic restrictions in the third quarter.

The forecast for inflation is a short-term increase to 3.25% before falling to around 2.75% over 2023 as supply-chain issues are resolved.

Despite market expectations of one, or more, rate hikes this year the RBA is among the most dovish of developed world central banks. Tuesday's statement however did not repeat the longstanding view that rates were unlikely to rise until 2023 or even 2024.

MNI Sydney Bureau | +61-405-322-399 |
MNI Sydney Bureau | +61-405-322-399 |

To read the full story

Why Subscribe to

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.