RBA Minutes: Policy Tightening Is Warranted

Members of the Reserve Bank of Australia's Monetary Policy Board acknowledged that inflation is expected to remain above the bank's target range for at least the next two years, minutes from the board's March 7 meeting revealed on Tuesday - so the decision to tighten policy was warranted.

The members said the Australia economy could certainly handle the gradual removal of stimulus as unemployment now sits at a 50-year low - even though activity has slowed somewhat in recent months.

At the meeting, the RBA hiked its key interest rate by a quarter-point to 3.60 percent, as widely expected. The interest rate on Exchange Settlement balances was also raised by 25 basis points to 3.50 percent. The RBA has tightened its monetary policy by altogether 350 basis points since May 2022.

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