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The Reserve Bank of Australia (RBA) published the Minutes of its December monetary policy meeting on Tuesday, highlighting that the Board members decided the case for steady rates was the stronger one at this meeting. Additional details of the RBA Minutes suggest that the central bank saw encouraging signs of progress on inflation, this needed to continue. Key takeaways “Board considered whether to raise rates by 25bp or hold steady.” “The decided case for steady rates was the stronger one at this meeting.” “Board saw “encouraging signs” of progress on inflation, this needed to continue.” “Whether further tightening required would be decided by data, assessment of risks.” “Recent data had not warranted a material change to the economic outlook.” “Board saw value in waiting for more data to assess the balance of risks.” “Risk inflation could stay high too long balanced by the risk of a sharper slowdown in demand.” “Consumption growth quite weak, many households facing a painful squeeze on finances.” “But domestic demand still running ahead of supply, inflation above several other countries.” “Board noted RBA staff forecast had inflation returning to the top of the band by end 2025 rather than midpoint.”  Market reaction At the time of writing, the AUD/USD pair is trading near 0.6707, holding higher while adding 0.06% on the day. About RBA Minutes The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD. RBA FAQs The Reserve Bank of Australia (RBA) sets interest rates…

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Filed under: News - @ December 19, 2023 5:16 am