Highlights
The Reserve Bank of Australia has published the minutes of its August 6 meeting. Officials at that meeting left their main policy rate, the cash rate, unchanged at 4.35 percent.
Consistent with the statement accompanying the decision, the minutes note that recent CPI data showed inflation remained above the target range of two percent to three percent and had not fallen at the pace that they would like to see. They noted staff assessments that the economy had less spare capacity than previously assumed and concluded that"the risk of inflation not returning to target within a reasonable timeframe had increased". Officials also noted that domestic final demand had been stronger than expected and that employment growth was still strong.
Reflecting these factors, the minutes show that officials again considered increasing policy rates at this meeting in addition to leaving them on hold. They judged that a rate hike could be appropriate if they were convinced that"the risk that inflation would not return to target in a reasonable timeframe had materially increased".
Updated RBA forecasts in the quarterly Statement of Monetary Policy, published on the same day as the meeting, show that officials now expect underlying inflation to return to the target range by the end of 2025 but headline inflation to take twelve months longer. Nevertheless, officials concluded that"the case to leave the cash rate target unchanged at this meeting was the stronger one". Although they cautioned that"it was difficult either to rule in or rule out future changes" in policy rates, the minutes are consistent with subsequent public comments advising that a cut in policy rates is unlikely in the near term.
Consistent with the statement accompanying the decision, the minutes note that recent CPI data showed inflation remained above the target range of two percent to three percent and had not fallen at the pace that they would like to see. They noted staff assessments that the economy had less spare capacity than previously assumed and concluded that"the risk of inflation not returning to target within a reasonable timeframe had increased". Officials also noted that domestic final demand had been stronger than expected and that employment growth was still strong.
Reflecting these factors, the minutes show that officials again considered increasing policy rates at this meeting in addition to leaving them on hold. They judged that a rate hike could be appropriate if they were convinced that"the risk that inflation would not return to target in a reasonable timeframe had materially increased".
Updated RBA forecasts in the quarterly Statement of Monetary Policy, published on the same day as the meeting, show that officials now expect underlying inflation to return to the target range by the end of 2025 but headline inflation to take twelve months longer. Nevertheless, officials concluded that"the case to leave the cash rate target unchanged at this meeting was the stronger one". Although they cautioned that"it was difficult either to rule in or rule out future changes" in policy rates, the minutes are consistent with subsequent public comments advising that a cut in policy rates is unlikely in the near term.
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.
