Fresh light is set to be shed on why the Reserve Bank held off on a further cut to interest rates despite lower inflation.
The central bank on Tuesday will release minutes from its meeting on April 1, when it decided to keep interest rates on hold at 4.1 per cent.
The bank’s decision on interest rates was made before US President Donald Trump’s tariffs decision threw global markets into chaos.
Mr Trump’s call to impose tariffs on dozens of countries before backflipping on the decision days later led to predictions of a 50 basis point reduction in the official cash rate when the Reserve Bank meets again in mid-May.
Each 25 basis point cut to the cash rate would shave about $90 off monthly repayments on a typical $600,000 mortgage.
Reserve Bank governor Michele Bullock said while it was too early to determine how the tariffs’ impact would affect interest rate decisions, Australia was well-placed to handle the financial uncertainty.
While the Reserve Bank’s April meeting was held before the tariff call, it could shed light on how the central bank examined global trends, Commonwealth Bank senior economist Belinda Allen said.
“Given the developments in the global economy, we do expect the RBA minutes to highlight global uncertainty but also allay concerns about financial markets,” she said.
“The response of trading partners, additional counter-responses from the US, exchange rate fluctuations and adjustments in other financial markets will be key considerations.”
April’s meeting was the first time the Reserve Bank’s monetary policy board met to decide on interest rates.
The bank’s board was split in two from March under reforms to the financial institution, with the monetary policy deciding on the cash rate while the governance board examines other policy areas.
“Uncertainty remains if votes will be released or if there will be any other changes in the minutes,” Ms Allen said.
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