by Swati Pandey
BNN Bloomberg
(Bloomberg) — Australia’s central bank resumed a discussion of interest-rate hikes at its May policy meeting before deciding that the case to stand pat was stronger as it aims to avoid “excessive fine tuning.”
Minutes of the Reserve Bank’s May 6-7 gathering showed the board discussed two options when it left the key rate at 4.35%, noting the risks around its economic forecasts were still “balanced” despite stronger-than-expected data in the run-up to the meeting.
The board “seems focused on looking through the ‘short-term variation in inflation to avoid excessive fine-tuning’,” said Belinda Allen, an economist at Commonwealth Bank of Australia. “As a result the hurdle to hike again seems high and instead the risks sit to a later start to the easing cycle than our base case” of November.