Highlights
The Reserve Bank of Australia has published the minutes of its April 4 meeting. Officials at that meeting left their main policy rate, the cash rate, on hold at 3.60 percent, its highest level since 2012. The RBA has increased policy rates by a cumulative 350 basis points since an initial rate increase in May 2022.
Consistent with the statement accompanying the decision, the minutes note that monthly inflation data pointed to a further easing of price pressures ahead of the meeting, consistent with officials' assessment that inflation likely peaked in late 2022. Officials reiterated, however, that inflation remains too high and is not expected to return to their target range of 2.0 percent to 3.0 percent until 2025.
The minutes also note that growth in consumer spending has slowed in recent months and that residential construction has also come under pressure. Officials forecast GDP growth to slow to around 1.5 percent in both 2023 and 2024 but expect the labour market to remain solid.
The minutes show that officials considered another 25 basis point rate hike at this meeting, with the high level of inflation the main factor supporting such a move. Officials also noted that households' financial position still generally remains strong. However, reflecting their assessment that monetary policy has already become"restrictive" as a result of previous rate hikes, officials concluded that a pause at this meeting was warranted. They also noted that upcoming data would provide them with crucial information to update their forecasts in May and to provide more information about the economic outlook.
Officials stressed, however, that the decision to leave rates on hold at this meeting did not imply that policy tightening would not resume in coming months. They also stressed that Australia's financial system is sufficiently resilient to withstand further policy tightening. The statement concludes by noting that the RBA"remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome."
Consistent with the statement accompanying the decision, the minutes note that monthly inflation data pointed to a further easing of price pressures ahead of the meeting, consistent with officials' assessment that inflation likely peaked in late 2022. Officials reiterated, however, that inflation remains too high and is not expected to return to their target range of 2.0 percent to 3.0 percent until 2025.
The minutes also note that growth in consumer spending has slowed in recent months and that residential construction has also come under pressure. Officials forecast GDP growth to slow to around 1.5 percent in both 2023 and 2024 but expect the labour market to remain solid.
The minutes show that officials considered another 25 basis point rate hike at this meeting, with the high level of inflation the main factor supporting such a move. Officials also noted that households' financial position still generally remains strong. However, reflecting their assessment that monetary policy has already become"restrictive" as a result of previous rate hikes, officials concluded that a pause at this meeting was warranted. They also noted that upcoming data would provide them with crucial information to update their forecasts in May and to provide more information about the economic outlook.
Officials stressed, however, that the decision to leave rates on hold at this meeting did not imply that policy tightening would not resume in coming months. They also stressed that Australia's financial system is sufficiently resilient to withstand further policy tightening. The statement concludes by noting that the RBA"remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome."
Definition
The Reserve Bank of Australia (RBA) publishes minutes of its meetings with a two week lag. The text expands on the statement published two weeks earlier at the time of the announcement.
Description
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.
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.
