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RBA Minutes: Further monetary policy tightening expected to reduce inflation

The Reserve Bank of Australia minutes have been released today.

The minutes of the March 7 monetary policy meeting, published on Tuesday, have shown that the Reserve Bank of Australia (RBA) Council only discussed raising the cash rate by 25 basis pointsup 3.6%, compared to the weighting of increases of between 25 and 50 basis points in February.

monetary policy was already in restrictive territory and economic prospects were uncertain.

The members “agreed to reconsider a break at the next meeting, acknowledging that a break would allow more time to reassess the outlook for the economy“, according to the minutes.

Further monetary policy tightening is expected to be necessary to reduce inflation.

The Council reiterated that probably further tightening of monetary policy would be necessary, as inflation was still too highthe labor market was tight and business surveys showed strong activity.

The RBA noted that recent releases on Gross Domestic Product, employment, wages and inflation had been softer than expected but not better than expected.

The Council said that at the April meeting it would closely follow upcoming releases on employment, inflation, retail trade and business surveys, as well as developments in the world economy.

Source: Fx Street

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