No news on December rate rise
(18 November 2009 – Australia) The Reserve Bank of Australia minutes from the last monetary policy meeting have not revealed the board’s interest rate intentions for December.
Analysts were looking to the minutes to distinguish whether the board would raise rates by another 25 basis points in December, making it the third consecutive rise.
The board noted that in the major economies, policy rates were steady but several of the major central banks continued to expand their balance sheets.
It is expected that the policy rates in these economies will remain the same for sometime, the minutes indicated.
The board discussed the global equity markets and noted that they had showed some volatility but were broadly unchanged over the month.
The board also noted that Australian banks had all reported solid underlying profits and were happy that their loan books are were performing better than expected.
The members considered the possible implications for Australian Banks if the global proposals for changes to liquidity and capital standards are accepted.
Strong competition for deposits, reflecting the desire by banks to reduce their reliance on short-term capital market funding, pushed up interest rates on deposits relative to other funding sources, the board also noted.
The board noted that in the major economies, policy rates were steady but several of the major central banks continued to expand their balance sheets.
It is expected that the policy rates in these economies will remain the same for sometime, the minutes indicated.
The board discussed the global equity markets and noted that they had showed some volatility but were broadly unchanged over the month.
The board also noted that Australian banks had all reported solid underlying profits and were happy that their loan books are were performing better than expected.
The members considered the possible implications for Australian Banks if the global proposals for changes to liquidity and capital standards are accepted.
Strong competition for deposits, reflecting the desire by banks to reduce their reliance on short-term capital market funding, pushed up interest rates on deposits relative to other funding sources, the board also noted.
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