The Reserve Bank of Australia published minutes from its December meeting. At that time, the Bank kept its monetary policy interest rate at 2 percent. In the minutes, the Bank noted that the inflation outlook may afford some scope for further easing to support demand. It said that it could be some time before construction picks up in China. However, Chinese policy actions are expected to support economic activity. There is still evidence of spare capacity in the Chinese economy.
In considering the stance of monetary policy, members noted that the available data suggested that the global economy continued to record moderate growth. Continued demand softness in Asia had been associated with a further decline in commodity prices. At the same time, there had been further growth in the United States and a continued recovery in Europe. Monetary policy was accommodative in most economies, which, combined with the low level of oil prices, was expected to support growth in Australia's major trading partners over the next couple of years. Core inflation rates remained stable, but generally below central banks' targets.
Members noted that recent domestic data had generally been positive. There continued to be evidence that very low interest rates were supporting growth in household consumption and dwelling investment, and the exchange rate was adjusting to the significant declines in key commodity prices and boosting demand for domestic production. This had translated into stronger employment growth and was consistent with surveys suggesting that business conditions were above average. Resource exports had continued to make a significant contribution to growth.
The RBA issues minutes of its meetings with a two week lag.
Although the RBA's Reserve Bank Board issues a detailed statement at the conclusion of its monthly meetings, investors also look to the minutes for a more detailed description of current economic outlook both domestically and abroad along with the latest RBB policy thinking.
It is only recently that the RBA has released meeting minutes. At the conclusion of their December 2007 meeting, the RBA announced several changes to its communications policy. Previously, a statement was released only if a policy change was made. Now a statement is released at the conclusion of every meeting. Another change concerned the timing of the policy announcement. Rather than waiting until the next day, the announcement occurs immediately after the conclusion of the meeting. In addition, minutes are now released two weeks after the meeting.
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