RBA minutes: Members observed that inflation had picked up more quickly than the bank had expected

The Reserve Bank of Australia (RBA) has published minutes of the last meeting and has stated that they will not raise interest rates until the target is met. The RBA is prepared to be patient but notes that inflation picked up more quickly than expected. 

''Australia's central bank is closer to meeting its economic goals than it has been for years, but is prepared to be patient on policy as wage growth continues to lag even as inflation picks up,'' Reuters reported. 

''Minutes of the Reserve Bank of Australia's (RBA) February meeting released on Tuesday showed its Board was yet to be convinced that the acceleration in inflation would be sustained and wanted to see wages respond before moving on interest rates.''

"The Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve," the minutes showed.

AUD/USD is a touch weaker on the minutes, 5 pips lower. 

Key notes

Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve.
Economic outlook was being supported by household and business balance sheets.
While inflation had picked up, members agreed it was too early to conclude that it was sustainably within the target band.
Members observed that inflation had picked up more quickly than the bank had expected.
Members noted that some moderation in inflation was expected as supply problems were resolved.
Members observed that the achievement of the goals was within sight for the first time in several years.

Why it matters to traders?

The Reserve Bank of Australia (RBA) publishes the minutes of its monetary policy meeting two weeks after the interest rate decision is announced. It provides a detailed record of the discussions held between the RBA’s board members on monetary policy and economic conditions that influenced their decision on adjusting interest rates and/or bond buys, significantly impacting the AUD. The minutes also reveal considerations on international economic developments and the exchange rate value.