Aussie Central Bank Confident On Nipping Inflation

Australia’s central bank is increasingly confident that inflation is moving sustainably toward its target.

The Reserve Bank of Australia (RBA) board discussed potential future scenarios, including easing monetary policy to stimulate growth or maintaining current restrictive levels. I Photo: Bidgee Wikimedia Commons

However, it remains too early to declare victory due to a recent uptick in consumer spending and a persistently tight labor market, according to minutes of the December meeting reported by Swati Pandey for Bloomberg News.

The Reserve Bank of Australia (RBA) board discussed potential future scenarios, including easing monetary policy to stimulate growth or maintaining current restrictive levels.

The minutes of the Dec. 9–10 meeting revealed that the board found either scenario plausible. It ultimately decided to keep the cash rate unchanged at 4.35%, citing insufficient new data to warrant a policy change.

The board highlighted the importance of upcoming updates on employment, inflation, and consumption, along with revised staff forecasts, ahead of the Feb. 17–18 meeting. Market participants view this review as "live," with traders assigning a more than two-thirds probability to a rate cut in February and fully pricing in two reductions by July.