It was a close call:RBA

The Reserve Bank says the arguments, which preceded its 25 point rate cut earlier this month were “finely balanced.”

It made that observation today, in the just published minutes of its Board meeting, On June 5, which authorised that cut.

“The arguments were finely balanced,” the published minutes said.

“ Recent domestic data generally had not suggested a significant weakening in conditions compared with the forecasts a month earlier.

“Moreover, there had not been time to assess the effects of the earlier reductions in the cash rate.

“However, there was clear evidence suggesting a softening in global conditions, and uncertainty about the future in Europe had increased significantly.

“ While spillovers had been limited thus far, there was a reasonable likelihood that the tendency toward precautionary behaviour both abroad and at home would intensify.

“Given this, and with inflation expected to remain in the lower part of the targeting range over the next year or so, members considered that there was scope for monetary policy to be a little more supportive of domestic activity,” the paper said.