The Reserve Bank of Australia (RBA) has published the minutes of its monetary policy meeting as follows, as reported by Reuters:
''Minutes of the Oct 4 policy meeting out on Tuesday showed the Reserve Bank of Australia's (RBA) Board weighed a range of arguments for hiking by 50 basis points, as it had for four months straight, but decided to lift the cash rate by 25 basis points to 2.6%.''
''The RBA Board noted rates had already risen by 250 basis points since May and much of that had yet to feed through into mortgage payments. The tightening had also hit home prices and household wealth and could cool consumption over time.''
''While the labour market was very tight, wage growth had not spiked like in some developed nations and could still some more before threatening inflation expectations, the minutes showed.''
''Many central banks abroad had also been increasing rates which was likely to cause a period of "significantly lower output growth" and help lessen inflationary pressures."Members noted that, in an uncertain environment, there was an argument to slow the adjustment of policy for a time to assess the effects of the significant increase in interest rates to date and the evolving economic outlook," the minutes showed.
''Still, the Board emphasised that inflation in Australia was too high at 6.1% and likely to rise toward 7.75% by year-end, with rents and utilities adding to cost pressures. The Board was resolute in returning inflation to its 2-3% target band and recognised this required keeping inflation expectations well anchored.''
"This was likely to require further increases in interest rates over the period ahead," the minutes showed.'
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About the RBA minutes
The minutes provide a detailed record of the discussions held between the RBA’s board members on monetary policy and economic conditions that influenced their decision on adjusting interest rates and/or bond buys, significantly impacting the AUD. The minutes also reveal considerations on international economic developments and the exchange rate value.
