Breaking: RBA’s Lowe: Prepared to ease policy further if demand disappoints, Aussie refreshes 2-week lows
|The Reserve Bank of Australia (RBA) Governor Lowe is on the wires now, via Reuters, making a scheduled speech titled "Inflation Targeting and Economic Welfare" at the Anika Foundation Luncheon, in Sydney.
Key Quotes:
Prepared to ease policy further if demand disappoints.
Reasonable to expect an extended period of low interest rates.
Evidence does not support a change to our 2-3% inflation target.
Certainly possible" demand will be strong enough to lift inflation in "reasonable timeframe".
Will be some time before inflation comfortably back within target range.
Board is "strongly committed" to making sure inflation returns to range.
Board has paid attention to shift in outlook for monetary policy globally.
Other arms of public policy could also play role in reviving demand.
We are not inflation nutters", current target is flexible enough.
Not impossible for central banks to meet their inflation targets.
Flexible labor market, rising participation has restrained wage growth, inflation.
Flexibility of labor supply is a positive development.
Flexible supply means employment growth can be stronger without overheating.
Underlying foundations of the Australian economy remain strong.
The Australian dollar came under fresh selling pressure on Governor Lowe's dovish remarks, knocking-off the AUD/USD pair to fresh 2-week lows of 0.6966. Lowe's comments flagged risks of aggressive RBA rate cuts, in an attempt to spur growth and inflationary pressures.
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