RBA: Growth and inflation forecasts cut, plays down jobless rate

FXStreet (Bali) - The RBA’s quarterly Statement on Monetary Policy maintained its policy steady, repeating that the most prudent course in period of rates stability, also saying that AUD remains high by historical standards, and that the fall in terms of trade means AUD could drop over time. The RBA also trimmed growth and inflation outlooks, while playing down the eye-catcher July 's jobless rate of 6.4% vs 6% expected, which represented a 12-year high, noting that there has been significant volatility in recent months. Key headlines courtesy of Reuters Australia c.bank repeats outlook likely to be period of stability for interest rates Sees economic growth little below average over 2014/15, above average thereafter Trims gdp forecast for end 2014 to 2.5 pct vs 2.75 pct, lowers forecast band for 2015 Underlying inflation for end 2014 seen at 2.25 pct vs 2.5 pct, 2.25-3.25 pct for end 2015 Removal of carbon tax to lower cpi by 0.75 ppt, underling inflation 0.25 ppt in 2014/15 Jump in july unemployment might be partly due to survey changes, sample rotation Unemployment rate likely to remain elevated for some time, not decline until 2016 Slack in labour market, improved productivity to keep domestic costs contained A$ high by historical standards, fall in terms of trade mean a$ could drop over time Falling mining investment, fiscal consolidation to drag on economic growth Growth supported by strong resource exports, low rates, upswing in home building Sees pick up in china aided by policy stimulus, expects beijing to meet 7.5 pct 2014 target