RBA minutes show concern over China’s slowdown

The Reserve Bank of Australia (RBA) released minutes today of its latest policy meeting that was held on November 4th. The minutes show that the central bank was concerned about China’s slowing growth. China is Australia’s major trading partner. The RBA was also worried about the Australian dollar exchange rate (still too high).

The board of the RBA felt there was “considerable uncertainty” about the outlook for the Chinese property market and its impact on the Asian giant’s economy when they met to discuss monetary policy earlier in the month.

The minutes also showed board members agreed monetary policy was doing its job as they left the main interest rate on hold at 2.5 percent for a 14th consecutive month.

“The Board judged that the current accommodative stance of monetary policy continued to be appropriate to foster sustainable growth in demand and inflation outcomes consistent with the target over the period ahead,” the minutes said.

“Members considered that the most prudent course was likely to be a period of stability in interest rates.”

Members judged the risks for the global economy was roughly balanced, although they “acknowledged that there was considerable uncertainty related to the outlook for the Chinese property market and the broader implications for the Chinese economy.”

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