RBA governor Bullock: We still think policy is in restrictive territory

• As we are still in restrictive territory, that is still exerting downwards pressure on inflation
• We didn’t go as high (on rates) as other countries, so they’ve had to cut quite quickly
• We can still possibly cut but we may not have quite as much room to go because we didn’t go as high in the first place
• We want to see more information on inflation and labour market before what we do next
• We are trying to find a balance here, we’re in the “narrow path”
• The aim is to get inflation back to the middle of the 2% to 3% target band
• The market has more confidence than I do on what path will deliver us sustainably back to the middle of the target band
• However, I don’t share that same confidence yet

This article was written by Justin Low at www.forexlive.com.