RBA awaits further domestic and international indicators
(21 November 2012 – Australia) Further rate cuts could be considered in the coming months according to Reserve Bank of Australia (RBA) minute notes from its November meeting.
Improved conditions in the global economy and possible higher inflation prompted the RBA to keep the cash rate unchanged this month at 3.25 percent.
‘‘Members considered that further easing may be appropriate in the period ahead,’’ the RBA said.
‘‘However, with prices data for the September quarter slightly higher than expected and recent information on the world economy slightly more positive, the board judged that the stance of monetary policy was appropriate for the time being.’’
The headline Consumer Price Index (CPI) rose by 1.2 percent in the September quarter on a seasonally-adjusted basis, and was two percent higher over the year according to the minutes.
‘‘These outcomes reflected, in part, the introduction of the carbon price, which had a noticeable effect on electricity and gas prices.’’
Aside from the carbon price effect, underlying inflation was expected to stay close to 2.5 percent over the coming two years, although that would depend on ongoing productivity growth and further moderation in wages growth, the RBA said.
The bank was also waiting to see how May, June and October’s rate cuts would play out in the economy.
‘‘Further effects of these changes were yet to be observed,’’ the RBA said.
It was also keeping a close eye on China, as its economy appears to be stabilising and the United States where housing and employment data suggested a recovery was underway.
‘‘Members considered that further easing may be appropriate in the period ahead,’’ the RBA said.
‘‘However, with prices data for the September quarter slightly higher than expected and recent information on the world economy slightly more positive, the board judged that the stance of monetary policy was appropriate for the time being.’’
The headline Consumer Price Index (CPI) rose by 1.2 percent in the September quarter on a seasonally-adjusted basis, and was two percent higher over the year according to the minutes.
‘‘These outcomes reflected, in part, the introduction of the carbon price, which had a noticeable effect on electricity and gas prices.’’
Aside from the carbon price effect, underlying inflation was expected to stay close to 2.5 percent over the coming two years, although that would depend on ongoing productivity growth and further moderation in wages growth, the RBA said.
The bank was also waiting to see how May, June and October’s rate cuts would play out in the economy.
‘‘Further effects of these changes were yet to be observed,’’ the RBA said.
It was also keeping a close eye on China, as its economy appears to be stabilising and the United States where housing and employment data suggested a recovery was underway.
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