On the first Tuesday of May 2017, the Reserve Bank of Australia (RBA) board will meet to discuss domestic and global economic conditions to come up with a monetary policy statement and decide on the appropriate level of cash rate.
In this assignment, you are required to put yourself in the position of a board member and write a business report with your recommendation to the board about the appropriate level of cash rate and what that would achieve in terms of an outcome for monetary policy and economic activity.
Your report should contain an explicit recommendation whether to increase, decrease (by how many basis points) or sustain the level of cash rate. More importantly, you need to provide at least three major discussion points that support your recommendation. These reasons should take into account the domestic and global economic conditions and aim to achieve the three objectives of the monetary policy set out by RBA.
The three main points should NOT be the three objectives of monetary policy; rather they are what you consider important factors that affect monetary policy.The first factor should be the inflation rate. Students will need to research what other primary considerations are.