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RBA Minutes: Need for further hike would depend on data, evolving assessment of risks
The Reserve Bank of Australia (RBA) published the Minutes of its August monetary policy meeting on Tuesday, highlighting that there prevails a need for further hike would depend on data, and evolving assessment of risks.
Additional details of the RBA Minutes suggest that the board considered raising rates by 25bp or holding steady.
The minute statement also showed that the board agreed that the case for holding rates steady was the stronger one while also seeing a "credible path" back to inflation target with cash rates at current 4.1%.
Key takeaways
Inflation heading in right direction, though service inflation too high.
Board saw "plausible scenarios" where inflation took longer than acceptable to return to target.
Staff inflation forecast had assumed one more hike, rates notably lower than in other countries.
AUD/USD remains pressured
AUD/USD fails to cheer the RBA Minutes amid mixed details as it drops 25 pips following the announcement to reverse the early day rebound, down 0.23% intraday near 0.6475 by the press time.
About RBA Minutes
The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.
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