Investing.com - The Reserve Bank of Australia's outlook for inflation was lowered from February levels as data indicated broad-based weakness in domestic cost pressures, though GDP growth and the labor market was little changed in the latest Monetary policy review released on Friday.
The forecasts assume the Australian dollar at a slightly higher level of 62.5 versus 62.0 on a trade-weighted basis while the crude oil price assumption is 30% higher at A$47. As in February, the forecasts have assumed market pricing for the cash rate.
It was the lower outlook for inflation along with latest developments in the housing market which led the RBA to cut the cash rate by 25 basis points to a new record low of 1.75% on Tuesday. Inflation is now seen at 1.5% in June, compared to a forecast of 2.0% earlier.
In the Statement on Monetary Policy the RBA didn't indicate an easing bias, but said it would continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time.