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Tight financial conditions and higher fuel costs are working to quell demand, minutes from the RBA’s July monetary policy meeting, released yesterday, have revealed.
In commentary that echoed last month’s minutes, the BRA highlighted a conflict between two opposing pressures to come to its decision to leave the cash rate unchanged.
While the central bank acknowledged that both consumer and business sentiment had deteriorated, labour market conditions had softened and consumer spending had slowed markedly, it remained concerned with inflationary pressures and the nation’s rising terms of trade.
The RBA concluded that current monetary policy would continue to slow demand, and provided it continued, inflation would be likely to decline over time.
Published: 16-07-08
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