Reserve Bank of Australia August meeting minutes
The Reserve Bank of Australia considered a case to raise rates but decided that a steady outcome better balanced the risks.The RBA mentioned that the cash rate might have to stay steady for an “extended period.”The RBA members agreed it is unlikely that rates would be cut in the short term.The RBA emphasized the need to be vigilant to upside risks to inflation, and that policy would need to remain restrictive.The RBA noted that an immediate hike in rates could be justified if risks to inflation had increased “materially.”The RBA suggested that keeping rates steady for a longer period than implied by markets could help restrain inflation.The RBA board stated that they would need to reassess this possibility at future meetings.The RBA board judged that the risks had increased that inflation would not return to target in a reasonable time frame.The RBA board indicated that they had limited tolerance for inflation remaining outside of the target band.
The minutes lean hawkish:
considered a case to raise ratesunlikely that rates would be cut in the short term
but there is wiggle room, this, for example:
would need to reassess … at future meetings
But, if you want a one-word summary I think ‘hawkish’ would best fit. Agree/disagree – let me know in the comments.
AUD/USD is circa 0.6731 and not a lot changed.
The most recent update on the Reserve Bank of Australia website re the cash and inflation rates
This article was written by Eamonn Sheridan at www.forexlive.com.
