Highlights
The Reserve Bank of Australia has published the minutes of its July 1 meeting. Officials at that meeting left their main policy rate, the cash rate, unchanged at 4.10 percent for the second consecutive month after having increased policy rates by 400 basis points since last May.
Consistent with the statement accompanying the decision, the minutes note that recent data had shown a further decline in headline inflation. Although officials still expect inflation will continue to fall, the minutes show that they now expect it will take longer to return to their target range. Previously this was expected to happen by mid-2025, but now officials expect it will happen in late 2025.
Officials noted that economic growth has slowed considerably in recent months, reflecting the impact of previous policy tightening. They also noted that the full impact on the economy of previous policy tightening had yet to be seen and warned of downside risks to the growth outlook.
Reflecting these uncertainties, the minutes show that officials considered another increase of 25 basis points as well as leaving rates on hold this month. Despite their ongoing concerns about upside risks to the inflation outlook, however, officials concluded that the fact that policy has already been tightened so aggressively meant they had time to"wait and see how the economy evolves". They reaffirmed, however, that they will do"what is necessary" to return inflation to its target range and advised that it may be necessary to tighten policy further in coming months.
Consistent with the statement accompanying the decision, the minutes note that recent data had shown a further decline in headline inflation. Although officials still expect inflation will continue to fall, the minutes show that they now expect it will take longer to return to their target range. Previously this was expected to happen by mid-2025, but now officials expect it will happen in late 2025.
Officials noted that economic growth has slowed considerably in recent months, reflecting the impact of previous policy tightening. They also noted that the full impact on the economy of previous policy tightening had yet to be seen and warned of downside risks to the growth outlook.
Reflecting these uncertainties, the minutes show that officials considered another increase of 25 basis points as well as leaving rates on hold this month. Despite their ongoing concerns about upside risks to the inflation outlook, however, officials concluded that the fact that policy has already been tightened so aggressively meant they had time to"wait and see how the economy evolves". They reaffirmed, however, that they will do"what is necessary" to return inflation to its target range and advised that it may be necessary to tighten policy further in coming months.
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.
