Australia's central bank didn't consider the case for raising interest rates at its last meeting, opting simply to stand pat at a 12-year high of 4.35%, minutes of its March 18-19 board discussion showed.
The Reserve Bank's March minutes on Tuesday made no mention of whether a rate hike was discussed, unlike previous releases when it set out the options considered by the board. The central bank has reviewed the case for raising rates at every meeting since it embarked on its tightening cycle in May 2022.
Members said risks around the economic outlook were "a little more even" when they decided to hold rates and agreed that "it was appropriate to characterize the policy outlook as one in which it was difficult to either rule in or out future changes" to the cash rate.
"Members agreed that returning inflation to target remained the board's highest priority and that it would take some time before they could have sufficient confidence that this would occur within a reasonable timeframe," the minutes showed. "At the same time, members noted the importance of preserving as many of the gains in the labor market as possible."
The RBA targets inflation of 2-3% and is aiming for the midpoint of the band.
The minutes cover a meeting that was held in a week where central banks from Japan to the US and UK made policy decisions. The Bank of Japan raised rates and scrapped its yield curve program, the Swiss National Bank unexpectedly cut rates, while Federal Reserve chief Jerome Powell charted a steady course.
The RBA board also discussed a paper on three options for the future framework that the RBA could use to implement monetary policy. The board endorsed transitioning to a new system of "ample reserves."
The board also discussed the RBA's half-yearly assessment of financial stability risks, noting that Australian households remain able to service their debts and meet essential expenses and this was expected to remain true even if inflation were to prove more persistent.
So far, broader economic data has generally moved in-line with the RBA's forecasts — GDP growth has eased, inflation is moderating, retail sales are slowing and unemployment remains low.
Most economists and money markets believe the RBA is all but done with rate hikes and the next move will be down, though an easing cycle is unlikely to begin in the near term. The RBA next meets on May 6-7 when it's likely to again leave its key rate unchanged.
Source : Bloomberg
