RBA: Interest Rate Decision | news.com.au — Australia’s leading news site
Australians wait anxiously as the Reserve Bank decides whether to raise rates again.
The central bank is widely expected to keep cash rates stable at 3.6 percent at Tuesday’s board meeting. If so, it would be the second month in a row after 10 consecutive increases.
The pause – decided at the board meeting in April – was designed to give borrowers time to catch their breath as banks continue to roll out the hikes.
April council minutes show that the council ultimately agreed on a wait and see approach, given that the “full effects … on the economy have yet to be seen given the delays in monetary policy transmission” .
In April, board members noted that the 10 consecutive rate hikes had contributed to a slowdown in the housing market, a significant slowdown in consumption and “financial pressures for a segment of households with home loans”.
Despite this, the minutes show an overarching commitment by the RBA board to do whatever it takes to contain inflation.
Inflation is at 7 percent for the 12 months in the March quarter, still well above the 2 to 3 percent target the RBA is aiming for, but lower than the 30-year high of 7.8 percent in the quarter. quarter of December.
Despite low unemployment, strong population growth likely played a role in inflationary pressures and thus in the RBA’s decision.
Tuesday’s meeting is the first since the government-ordered independent review of the Reserve Bank was handed over. It advised the central bank to look at interest rates only eight times a year, instead of eleven times.
The review also recommended splitting the central bank into two councils – one to focus solely on monetary policy, the other on governance.
The government agrees in principle with all 51 recommendations of the review.