Australia | Dec 16 2008
By Rudi Filapek-Vandyck
If there is one conclusion to be drawn from the minutes of the last board meeting of the Reserve Bank of Australia on December 2nd, released today, it is that there won’t be another meeting until February next year. Members of the board thought it was still appropriate to take off another 100 basis points of the official cash rate and bring it down to 4.25%.
But from now time has arrived to sit on the sidelines and watch further developments in both the domestic and the international economic arena. That much should have become clear from today’s release.
Probably the most important paragraph in today’s release (and may we say the only paragraph that taught us anything new) is the following one:
“Members observed that, with the decision at this meeting, there had been a major easing in monetary policy over the past few months. They considered that the setting of monetary policy, combined with the spending measures announced by the Government, which were soon to take effect, and the large depreciation of the Australian dollar amounted to significant stimulus that would support demand over the year ahead. The size of the response to date was judged to be such that a period of assessment of local and overseas events was warranted over the summer.”
Pace and size of further interest rate cuts will now be decided by economic data.