Policymakers of the Reserve Bank of Australia said more interest rate hikes will be needed in the process of normalizing monetary policy over the months ahead, the minutes of the meeting held on August 2 showed Tuesday.
At the meeting, the board had decided to raise the cash rate by 50 basis points to 1.85 percent. It also increased the interest rate on Exchange Settlement balances by 50 basis points to 1.75 percent.
Members said the increase in interest rates over recent months has been required to bring inflation back to target.
In August, the board observed that it was appropriate to tighten the policy given high inflation, the resilient economy and the tight labor market.
Although the central bank intends to normalize policy, it is not on a pre-set path, the minutes said. The bank is in the process of normalizing monetary conditions in a way that keeps the economy on an even keel.
The path to achieve this balance is a narrow one and subject to considerable uncertainty, members said.
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