by Alan Thornhill
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.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Thursday June 20
The Dow Jones index fell 206.04 points to 15,112.20
Bernanke says Fed on Course to End Asset Buying in Mid-2014
Senate to grill corporate watchdog over inaction on information from CBA whistleblowers.
Rudd supporter Joel Fitzgibbon says Labor “Leadership is no longer an issue, it’s all behind us.”
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