Highlights
The Reserve Bank of Australia has published the minutes of its May 5th meeting. Officials at that meeting increased their main policy rate, the cash rate, by 25 basis points from 4.10 percent to 4.35 percent.
Consistent with the statement accompanying the decision, the minutes note that policy board members were focussed on the impact of the Iran conflict on current and prospective conditions. In particular, data published just before the meeting showed CPI inflation surging to 4.6 percent in March. The minutes confirm that members already had concerns about the outlook for inflation ahead of the Iran conflict because of capacity pressures in the domestic economy, but now judged that inflation risks had worsened. But officials also expressed concerns about the impact the conflict could have on activity.
Reflecting these considerations, members deliberated between no change in policy rates and an increase of 25 basis points, but all but one concluded that policy tightening was warranted. Officials again stressed that they will do what they consider necessary to deliver price stability and full employment, implying that they are ready to increase rates again if inflationary pressures do not start to moderate soon.
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.