The minutes of the June edition of the Reserve Bank of Australia (RBA) show that policymakers remain committed to doing what is necessary to ensure inflation in Australia returns to target over time.
The following are some of the indications stated in the minutes of the meeting that have just been published:
Agreed further steps need to be taken to normalize monetary policy in Australia in the coming months.
Inflation is expected to continue to rise, before declining again around the 2-3% target range in 2023.
The most significant economic resilience can be seen in the labor market.
There is a significant risk that inflation will not return to target if current policy settings are maintained.
Policymakers feel a 25 basis point increase in each meeting this year will be a swift tightening.
Agreed for a 50 basis point increase at the June meeting because interest rate levels are still very low.
A 25 or 50 basis point increase will put the cash rate below 1%, which is still at the easing level. Therefore, further improvements will be required.
The reaction displayed by the Aussie dollar following this publication saw the currency trade little changed at around 0.69700 against the USD.
Prior to the release of the minutes of the meeting, investors were shown a speech by Governor Philip Lowe who also gave similar instructions to normalize policies in the fight against inflation.
