Despite an improvement in consumer confidence, the Reserve Bank is cautious about raising rates too soon.
According to the Reserve Bank’s 2 February board meeting minutes, while the housing market remained “fairly buoyant” throughout December, loans approvals declined.
"[P]erhaps indicating initial reactions to the tightening of policy,” the minutes said.
While it is widely expected that rates will climb even higher over the coming year, the Reserve Bank has said it doubts whether or not future rates rises would be likely to occur on a monthly basis.
“Members expect that, if economic conditions continue to improve as expected, further increases to the cash rate are likely to be necessary,” the minutes said.
“But they did not regard that outlook as requiring an increase at every meeting, and they saw the earlier moves to begin withdrawing monetary stimulus promptly as affording the board a degree of flexibility in its subsequent decisions.”