The trading opening of the Asian session was decorated with the publication of the minutes of the Reserve Bank of Australia (RBA) policy meeting for the month of February which has raised interest rates by 25 basis points to 3.35%.
Here are some key details taken from the minutes:
Policymakers consider an increase of 25 basis points or 50 basis points.
Not considering stopping rate hikes.
There is a pattern of rising shocks on inflation, supporting the argument for a 50 point hike.
Inflation that remains high for longer risks causing a price-wage spiral. A situation where wages rise and consumer prices soar occurs in cycles.
Policymakers agree further rate hikes may be necessary in the coming months.
The RBA's official cash rate is still low compared to other developed countries.
The RBA will do whatever it takes to get inflation back on target.
The final decision decided interest rates to be increased by 25 basis points.
Following on from the minutes of this meeting, it can be seen that the RBA remains inclined to increase interest rates due to Australia's still high inflation rate.
Consumer inflation was at a 32-year high of 7.8% in the fourth quarter of 2022, and is only expected to move slowly towards the central bank's 2%-3% target by mid-2025.
