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RBA says interest rates ‘too low’

RBA says interest rates ‘too low’
The Reserve Bank has claimed that interest rates were raised for the third straight month in December because they were ‘‘too low for an economy that had resumed expanding.”
The minutes of the December board meeting revealed that the decision to raise interest rates was “finely balanced” between board members.
‘‘Members agreed that the level of the cash rate set when the outlook appeared to be much weaker would be too low for an economy that had resumed expanding, with a smaller amount of spare capacity than had earlier been expected,’’ the minutes said.
The central bank lifted the cash rate by 25 basis points to 3.75 per cent on December 1 after two similar moves in October and November.
The minutes showed the board looked at a range of economic indicators pointing to an expanding domestic economy and strengthening private demand, particularly in the resource sector, even as government stimulus was being withdrawn.

The Reserve Bank has claimed that interest rates were raised for the third straight month in December because they were “too low for an economy that had resumed expanding”.

The minutes of the December board meeting have revealed that the decision to raise interest rates was “finely balanced” between board members.

“Members agreed that the level of the cash rate set when the outlook appeared to be much weaker would be too low for an economy that had resumed expanding, with a smaller amount of spare capacity than had earlier been expected,” the minutes said.

The central bank lifted the cash rate by 25 basis points to 3.75 percent on December 1 after two similar moves in October and November.

The minutes showed the board looked at a range of economic indicators pointing to an expanding domestic economy and strengthening private demand.

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