RBA Minutes Showed that China Fears Kept Rate on Hold

From the minutes published today:

Members noted that very low interest rates would continue to support growth in dwelling investment and household consumption. There were indications that the measures implemented by APRA had slowed the growth in lending for investment housing. Dwelling prices continued to rise strongly in Sydney, though trends had been more varied across other cities. The Bank was continuing to work with other regulators to assess and contain risks that may arise from the housing market. Prices in most other asset markets had been supported by lower long-term interest rates, while equity prices had moved lower and been more volatile recently, in parallel with developments in global markets.
Although the demand for labour had improved, particularly in service sectors, members noted that spare capacity remained and wage pressures continued to be weak. As a result, domestic cost pressures were likely to remain well contained and offset the expected rise in the prices of tradable items over the next couple of years. Inflation was forecast to remain consistent with the target over the next one to two years.
Given these considerations, the Board judged that it was appropriate to leave the cash rate unchanged. Information about economic and financial conditions would continue to inform the Board’s assessment of the outlook and whether the current stance of policy remained appropriate to foster sustainable growth and inflation consistent with the target.

via RBA

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza