RESERVE Bank of Australia board members agreed that further reductions to the cash rate were “more likely than not” when they cut it to a record low 1.25 per cent this month.
Minutes from the RBA’s June 4 meeting show members agreed that a further easing in monetary policy would likely be appropriate as the central bank tries to stimulate the economy through lowering the exchange rate, reducing borrowing costs for businesses, and lowering interest payments on loans to households.
The minutes showed the RBA correctly anticipated GDP growth to have firmed up compared to the preceding two quarters when data was published the day the meeting, although the 0.4 per cent expansion over the three months to March turned out to be softer than the market had expected.
The minutes confirmed the RBA will be monitoring the jobs market as it mulls the timing of any further cuts.
The central bank’s first move in any direction since August 2016 followed another month of weak economic data, most notably an unexpected rise in the unemployment rate for April to 5.2 per cent.