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RBA meeting this week, but there is no chance of a move on rates - Westpac

The Reserve Bank Board meets next week on December 5th, but argued that there is no chance that the Board will decide to move rates. 

Key Quotes:

"This meeting will mark the 15th consecutive meeting where policy has remained on hold. Since the last Board meeting, we have seen the November Statement on Monetary Policy where the Bank surprised by lowering its underlying inflation forecasts to 1.75% in 2018 (from 2% - mid-point of the range) and 2% in 2019 (from 2.5% - midpoint of the range)."

"This change was attributed to the rebasing of the weights in the CPI by the Australian Bureau of Statistics which represented around 0.2 percentage points on the Index. That change may certainly explain the reduction from 2% to 1.75% in 2018 but not the full deduction of 0.5 percentage points in 2019 from the middle of the target band to the bottom of the band. (Only the 0.25% could be justified on these technical grounds even though the weights will be revised every year from here on). These forecast changes represent a clear downgrading of the Bank’s outlook for inflation pressures. 

In his Statement following the November meeting, the Governor noted, “inflation remains low, with both CPI and underlying inflation running a little below 2 per cent. In underlying terms inflation is likely to remain low for some time…” He is likely to repeat this sentiment in December."

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