RBA faces tough April meeting
Tuesday, March 17, 2009
The Reserve Bank of Australia (RBA) is leaving its options open for its board meeting on April 7.
In the minutes of its March 3 meeting, the RBA said its board had pondered the question of whether to cut interest rates again in March or to 'pause for a further evaluation of the situation'.
It was obviously not a clear-cut decision.
'Members could see reasonable cases for both courses of action,' the minutes said.
In the end they decided that after the big cuts in rates over the previous five meetings, bringing the cash rate from a 12-year high of 7.25 per cent to a 45-year low of 3.25 per cent, it was better to stay on the sidelines.
'Members believed this would leave adequate flexibility for policy at future meetings,' the minutes said.
Overall, the minutes do not give a clear indication of what the RBA is likely to do on April 7.
There will again be reasonable cases to support both a further rate cut and another month on hold, with another difficult decision on the cards.
