RBA minutes suggest another interest rate cut isn’t imminent with board expressing ‘caution’
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Reserve Bank board members say February cut does ‘not commit them to further reductions in the cash rate target at subsequent meetings’

The Reserve Bank is cautious about future cash rate cuts and doesn’t view last month’s decision to reduce the official interest rate level as a commitment to make further reductions, according to the minutes of the bank’s recent board meeting.

The 18 February meeting minutes, released on Tuesday, deflate the hopes of mortgage holders of another quick-fire reprieve in lending rates. They also appear to make another pre-election rate cut less likely.

The minutes show that the RBA board “was not yet assured” inflation could be returned to the target range with a lower cash rate.

“The RBA cut the cash rate by 25 basis points to 4.1% at its February meeting, representing the first reduction since early in the pandemic.

Given rate changes are often part of a series – as they were on the way up – the change could have signalled the start of a new cycle, with some economists at the major banks anticipating a further three cuts this year.

The minutes show that while the RBA opted to cut the cash rate due to concerns that higher borrowing rates could have adverse effects on the economy, the decision was not a sure sign that more would follow.

“In light of these considerations about the risks surrounding the board’s decision, members agreed that their decision at this meeting did not commit them to further reductions in the cash rate target at subsequent meetings,” the minutes stated.

The meeting minutes were in line with the cautionary tone adopted by the RBA governor, Michele Bullock, who has pushed back against expectations of a series of cuts.








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