Highlights
The Reserve Bank of Australia has published the minutes of its May 20 meeting. Officials at that meeting lowered their main policy rate, the cash rate, by 25 basis points from 4.10 percent to 3.85 percent.
Consistent with the statement accompanying the decision, the minutes note that officials remained confident that underlying inflation will be around the mid-point of their target range of two percent to three percent over much of the forecast period. Officials also judged that consumer spending is recovering and that conditions in the the labour market remain strong.
The minutes also note, however, that external risks to the growth outlook remain elevated, with officials highlighting the potential for trade tensions to disrupt global trade and discourage spending and investment by consumers and businesses. Although they acknowledged that the outlook remains uncertain, the statement notes that officials considered a"severe downside scenario" when making their decision.
Reflecting these considerations, officials concluded that a further rate cut was warranted at this meeting. They also argued that they are"well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia", suggesting that global trade tensions will be a major focus ahead of their next policy meeting. Officials reiterated that their highest priority is to meet their inflation objectives and that they will do what is necessary to achieve that outcome.
Consistent with the statement accompanying the decision, the minutes note that officials remained confident that underlying inflation will be around the mid-point of their target range of two percent to three percent over much of the forecast period. Officials also judged that consumer spending is recovering and that conditions in the the labour market remain strong.
The minutes also note, however, that external risks to the growth outlook remain elevated, with officials highlighting the potential for trade tensions to disrupt global trade and discourage spending and investment by consumers and businesses. Although they acknowledged that the outlook remains uncertain, the statement notes that officials considered a"severe downside scenario" when making their decision.
Reflecting these considerations, officials concluded that a further rate cut was warranted at this meeting. They also argued that they are"well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia", suggesting that global trade tensions will be a major focus ahead of their next policy meeting. Officials reiterated that their highest priority is to meet their inflation objectives and that they 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.
