(16 June 2010 – Australia) The minutes from the latest meeting of Australia’s monetary powers has revealed that the decision to keep the official cash rate at 4.5 percent was due to concerns over the growing debt crisis in Europe.The Reserve Bank of Australia’s board said at the June meeting that it would wait until June’s consumer price index data was released before deciding whether further action should be taken in rates.
In considering the setting of monetary policy, members noted that the situation in Europe had deteriorated significantly over the previous month, the central bank said in the minutes.
The difficulties in Europe would inevitably weigh somewhat on prospects for global growth, the minutes continued.
The minutes also revealed that domestic results had been querying with the board stating that there has been a high level of activity in the construction sector from the fiscal stimulus, but retail spending had been relatively subdued and there were some signs of slowing in the housing market.
The RBA also said interest rates were now at ‘average levels’, leading some economists to believe that a rate stall is likely in July.