The Reserve Bank of Australia (RBA) will release its monetary policy decision on Tuesday, March 19. Economists at Commerzbank analyze Aussie’s outlook ahead of the meeting.
RBA likely to stay on track
It should be anticipated that the upcoming statement will echo its predecessor closely. Despite recent improvements in inflation, achieving the RBA’s target remains a considerable distance away. Furthermore, the prolonged duration of inflation’s descent, compared to Western nations, raises concerns that Australia’s disinflation might similarly stagnate, albeit with a delay. This aligns with the RBA’s latest projections, foreseeing a gradual decrease in inflation towards the target.
The RBA might opt to remove any suggestion of an impending rate hike, reflecting the prevailing trend where market participants now anticipate potential easing measures in Australia. However, significant deviations from the current stance are unlikely. The RBA may reserve clearer signals for future announcements, once new forecasts are released and additional data becomes available. Should the RBA align with this expectation, the Australian dollar could experience moderate gains following the decision.
