Investing.com - The Reserve Bank of Australia's quarterly monetary policy review released on Friday suggests there is further scope to cut the cash rate from a record low 2% as growth may remain below trend.
The RBA cut growth and inflation forecasts as it assesses the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with
targets.
The new forecasts in the quarterly Statement of Monetary Policy assumed the cash rate would move in line with market pricing. Assumptions for the Australian dollar, the trade-weighted index and oil prices were higher compared with February and in line with current prices.
On Thursday the money market was pricing in a maximum of 13 basis points of cash-rate cut by November.
The RBA cut growth and inflation forecasts as it assesses the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with
targets.
The new forecasts in the quarterly Statement of Monetary Policy assumed the cash rate would move in line with market pricing. Assumptions for the Australian dollar, the trade-weighted index and oil prices were higher compared with February and in line with current prices.
On Thursday the money market was pricing in a maximum of 13 basis points of cash-rate cut by November.
Underlying inflation, which is used to monitor the 2% to 3% target band is seen at 2.50% by December, down from a range of 2% to 3%. GDP is seen at 2.50% growth, down from a range of 2% to 3%.
Further out to June 2017, assessments were also downgraded for both growth and inflation.
Further out to June 2017, assessments were also downgraded for both growth and inflation.