Economic Buzz: Australias Central Bank Had Considered 40Bps Hike In May

17 May 2022 , 11:44 AM

In the minutes of May 3 meeting, Reserve Bank of Australia revealed that three options on interest rate hikes were considered, including 15bps, 25bps and 40bps. Raising the cash rate by 15bps was not preferred given that policy was very stimulatory and that it was highly probable that further rate rises would be required. And argument for 40bps could be made given the upside risks to inflation and the current very low level of interest rates. But the preferred option of was 25bps, as a move of this size would help signal that the Board was now returning to normal operating procedures after the extraordinary period of the pandemic.Powered by Commodity Insights