RBA Minutes April 2015 (edited) - quick version

Fill the gaps in this heavily edited version of the RBA Minutes of its April 2015 Board Meeting. A good exercise to familiarise yourself with the forces impacting on the economy in 2015

Fill in all the gaps, then press "Check" to check your answers. Your goal should be to achieve 100% for each question.
Considerations for Monetary Policy

Members' overall assessment was that the outlook for global growth had not changed significantly over the past month and that it would be supported by stimulatory policies and the fall in the price of since mid 2014. They observed that the apparent slowing of growth in , in particular the further deterioration in conditions in the Chinese py market, had placed some additional downward pressure on the for steel and on the prices of Australia's key cy es. Conditions in global financial markets had remained very ae. Changes to the stance of monetary policy by any of the major central and further significant developments in Europe had the potential to affect market conditions in Australia, including the rate, over the coming year.

Data available at the time of the meeting suggested that the Australian economy had continued to grow somewhat below in the December and into the first quarter of 2015. There had been evidence to suggest that the growth in consumption and dwelling i had picked up, supported by the very low levels of rates. Exports were also growing. However, a significant pick-up in non- business investment was yet to occur and several indicators suggested it would remain subdued for longer than had earlier been anticipated. At the same time, the recent declines in bulk commodity could, at the margin, lead to a larger-than-expected fall in mining and some decline in the production of ore and coal. Data for the labour suggested that the economy was likely to be operating with a degree of spare for some time and that labour market conditions were likely to remain subdued. As a result, pressures were expected to remain contained and was forecast to remain consistent with the over the next year or so.

Members remained alert to the possibility that the low levels of interest rates could foster imbalances in the h market. The most recent data suggested that activity in the housing market had remained strong, but there had been little change to housing market conditions overall or in the growth of housing c in early 2015. Although prices continued to rise rapidly in and, to a lesser extent, Melbourne, trends elsewhere were more varied. Members noted that the Bank was working with other regulators to assess and contain risks arising from the housing market.

Overall, members considered that the current setting of policy was and providing support to the economy. They also acknowledged that a lower rate would help achieve more bd growth in the economy. Further of the Australian dollar was likely given the recent declines in key prices.

In considering whether or not to reduce the rate further at this meeting, members discussed the various channels through which monetary policy was affecting the economy at present, including the price and rate channels. In assessing the operation of the flow channel in particular, they noted that the responsiveness of borrowers and to changes in interest rates and asset prices was unusually uncertain in a world of very low and high household le. Members also saw advantages in receiving more data, including on inflation, to assess whether or not the economy was on the previously forecast path and allowing more time for the economy to respond to the reduction in the cash rate earlier in the year.
Taking all these factors into account, the Board judged that it was appropriate to hold rates steady for the time being, while accepting that further of policy may be appropriate over the period ahead to foster s growth in demand and consistent with the target.

The Decision

The Board decided to leave the rate unchanged at per cent.