RBA Board Says Another Rate Cut Inconsistent With Cautious Stance, Minutes Show

(RTTNews) - Reserve Bank of Australia's policymakers said cutting the interest rate for a third straight time within the gap of four meetings would be inconsistent with the cautious monetary policy stance, the minutes of the July monetary policy meeting showed Tuesday.

"Lowering the cash rate a third time within the space of four meetings would be unlikely to be consistent with the strategy of easing monetary policy in a cautious and gradual manner to achieve the Board's objective," the minutes said.

Majority of members said that it would be prudent to wait for confirmation that inflation would sustainably return to target as forecast before easing policy further.

The observed that the board will receive more information including quarterly inflation report, labor market data and how the global economy evolves before the next meeting.

Meanwhile, a minority of members argued for rate cut as they placed more weight on downside risks to the economic outlook.

Markets widely expected the RBA to cut the cash rate by a quarter-point on July 8. But with a majority of 8-3, the board voted to hold the rate at 3.85 percent. Further, members agreed to improve the effectiveness of the board's communication by disclosing an unattributed record of votes at the July meeting and future meetings.