Highlights
The Reserve Bank of Australia has published the minutes of its November 7 meeting. Officials at that meeting increased their main policy rate, the cash rate, by 25 basis point to 4.35 percent after they left it unchanged in the four previous meetings.
Consistent with the statement accompanying the decision, the minutes note that measures of inflation had picked up in recent months after moderating earlier in the years. Officials now consider that demand pressures are stronger than they had expected and also noted ongoing tightness in labour and housing markets. Reflecting these factors, officials revised up their near-term inflation forecasts earlier in the month. Officials also revised up the near-term forecasts for output growth earlier in the month, though the minutes note that inflation and higher interest rates are continuing to weigh on real incomes and consumer spending.
Reflecting these uncertainties, the minutes show that officials again considered as leaving rates on hold this month in addition to an increase of 25 basis points. However, despite their concerns about downside risks to the growth outlook, officials concluded that the risk of inflation taking too long to return to its target range was enough to warrant a shift in policy settings after four months of no change. Officials also reaffirmed their willingness to do"what is necessary" to return inflation to its target range, and again indicated that it may be necessary to tighten policy further in coming months.
Consistent with the statement accompanying the decision, the minutes note that measures of inflation had picked up in recent months after moderating earlier in the years. Officials now consider that demand pressures are stronger than they had expected and also noted ongoing tightness in labour and housing markets. Reflecting these factors, officials revised up their near-term inflation forecasts earlier in the month. Officials also revised up the near-term forecasts for output growth earlier in the month, though the minutes note that inflation and higher interest rates are continuing to weigh on real incomes and consumer spending.
Reflecting these uncertainties, the minutes show that officials again considered as leaving rates on hold this month in addition to an increase of 25 basis points. However, despite their concerns about downside risks to the growth outlook, officials concluded that the risk of inflation taking too long to return to its target range was enough to warrant a shift in policy settings after four months of no change. Officials also reaffirmed their willingness to do"what is necessary" to return inflation to its target range, and again indicated 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.
