In a post meeting speech, RBA Governor Philip Lowe said “the situation today is quite different from that in March last year,” when the 3-year yield target was introduced. “We are no longer looking over a cliff but instead transitioning from recovery to expansion,” he added. “This improvement has widened the range of plausible scenarios for the cash rate.” The central scenario is still that condition for rate hike “will not be met until 2024″. But he added, ” there are alternative plausible scenarios as well”.
On extending asset purchases to AUD 4B a week until just November, Lowe said it “strikes the right balance”. ” It allows the possibility of a timely recalibration of the Bank’s bond purchases in either direction…” and, “we are not locked into any particular path and bond purchases could be scaled up again if economic conditions warrant.”
