RBA Minutes: Rate Hike Appropriate To Combat Inflation
(RTTNews) - Members of the Reserve Bank of Australia's Monetary Policy Board agreed that it was necessary to again hike its benchmark lending rate in the face of soaring inflation, minutes from the central bank's October 4 meeting revealed on Tuesday.
The minutes showed that there was considerable discussion over whether to raise the interest rate by 25 basis points, or again by 50 basis points as at the previous meeting.
While there were solid cases for both instances, the members agreed that it would be safer to go with the smaller hike in the face various downside risks to global growth. The smaller increase would also allow the members a better opportunity to assess the effectiveness of its current policy stance.
At the meeting, the RBA raised its benchmark rate by a quarter-point - lifting the cash rate target by 25 basis points to 2.60 percent from 2.35 percent. This was the highest rate since mid-2013. The board also increased the interest rate on exchange settlement balances by 25 basis points to 2.50 percent.
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