RBA’s meeting held on September 5, the minutes revealed that officials weighed two courses for monetary policy: increasing cash rate target by 25 bps or standing pat.
After a thorough consideration of the prevailing economic circumstances, members resolved that maintaining the current cash rate was the more compelling choice, highlighting the necessity to allot more time to gauge the comprehensive impacts of monetary policy tightening enacted since May 2022. This consensus is grounded in an understanding of the substantial delays that characterize transmission of policy repercussions through the economy.
Amid these considerations, members also highlighted potential risks. Specifically, there were concerns regarding the possibility that “the economy could slow more sharply than forecast.” Factors like potentially weaker consumption and mounting downside risks to the Chinese economy were flagged.
However, the minutes reflected a cautiously optimistic tone, with members deducing that “recent developments had not materially altered the outlook.” The general consensus remained that the economy still seems to be on a balanced path where inflation is poised to return to the target range, and employment growth is anticipated to sustain its momentum.