RBA March minutes show the Bank did not consider the case for an interest rate rise

Reserve Bank of Australia

Headlines via Reuters

• No mention in minutes that board considered option to raise rates
• Board agreed it was
  difficult to either rule in or out future changes in cash rate
• Economic outlook
  uncertain but risks seemed broadly balanced
• Would take “some
  time” before board could be confident inflation returning to
  target
• Upside risks to
  inflation had not yet materialised, while consumption was very weak
• Inflation high but
  gradually returning toward target, labour market easing
• Gap between demand
  and supply in economy “closing relatively quickly”
• Board judged demand
  would continue to exceed supply for a time
• Labour market a
  little tighter than consistent with inflation at target
• Wage growth may have
  peaked, but not expected to decline quickly
• Recovery in
  productivity needed to balance high unit labour costs
• Overall financial
  conditions remained restrictive, particularly for households

Full text is here:

• Minutes of the Monetary Policy Meeting of the Reserve Bank Board

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The minutes confirm the shift to less hawkish at the Bank that was evident on the day of the meeting. The March meeting left the cash rate unchanged:

• RBA announce on hold cash rate at 4.35%, as expected
• AUD/USD lower after RBA left its cash rate unchanged and changed wording on future moves

And, from Governor Bullock’s news conference on the day:

• RBA’s Bullock: We’re making progress in fight against inflation
• RBA’s Bullock: We are responding to data as the data comes out

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This article was written by Eamonn Sheridan at www.forexlive.com.