Tue, 17 May 2011 03:58:00 +0200

Australia - RBA hawkish, higher rates needed to better manage inflation

FXstreet.com (California) - In the RBA meeting minutes today, RBA Governor, Glenn Stevens announced that the board will leave the cash rate unchanged at 4.75% for a 6th consecutive month and that the country will be surely in need of higher interest rates at some point to keep a lid on price pressures.

“Members viewed the current mildly restrictive stance of monetary policy as remaining appropriate, with recent rises in the exchange rate likely to have further tightened conditions, particularly in some sectors of the economy,” was stated at the minutes.

“Members observed that the behavior of households and the labor market would be important determinants of the outcome for inflation over the next few years,” the statement read. “In addition, it would be important that inflation expectations remained anchored and that economic policies were conductive to productivity growth.”