RBA’s March meeting minutes released
(21 March 2012 – Australia) Minutes of the Reserve Bank of Australia's (RBA) 6 March meeting were released on Tuesday, showing policy makers were less worried about Europe’s debt crisis, focusing on an improving global outlook.
'Overall, members noted that while this downside risk could still materialise, this seemed somewhat less likely than a few months ago,' the minutes showed.
Should Europe take a nasty turn, there was 'ample scope' to cut rates as long as inflation remained contained, the minutes showed. The RBA expects inflation to remain within its 2-3 percent target band over the next few years.
The RBA kept its cash rate at 4.25 percent for a second month at its March meeting, but left the door open to further easing if necessary. It had lowered rates by a total of 50 basis points back in November and December.
The board considered interest rates in the economy was still around 'average levels'.
There had been speculation that the move by banks to lift home loan rates independent of changes in the cash rate could prompt an easing by the RBA.
'Weakness in parts of the economy - including manufacturing, building construction and parts of the retail sector - was being approximately balanced by the strength in the mining sector and some services industries,' the minutes said.
'On balance, the board considered that it was appropriate for interest rates to be around their average levels, which was judged to be the case at present.'
The minutes also showed the RBA judged that China had been successful in slowing its economy to a more sustainable pace. China is Australia's single biggest export market.
Should Europe take a nasty turn, there was 'ample scope' to cut rates as long as inflation remained contained, the minutes showed. The RBA expects inflation to remain within its 2-3 percent target band over the next few years.
The RBA kept its cash rate at 4.25 percent for a second month at its March meeting, but left the door open to further easing if necessary. It had lowered rates by a total of 50 basis points back in November and December.
The board considered interest rates in the economy was still around 'average levels'.
There had been speculation that the move by banks to lift home loan rates independent of changes in the cash rate could prompt an easing by the RBA.
'Weakness in parts of the economy - including manufacturing, building construction and parts of the retail sector - was being approximately balanced by the strength in the mining sector and some services industries,' the minutes said.
'On balance, the board considered that it was appropriate for interest rates to be around their average levels, which was judged to be the case at present.'
The minutes also showed the RBA judged that China had been successful in slowing its economy to a more sustainable pace. China is Australia's single biggest export market.
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