While the Reserve Bank of Australia (RBA) appears to be in favour of cutting the current cash rate further, it remains doubtful that the decision will come during the remainder of 2013.
The minutes of the RBA monthly board meeting, released yesterday, showed that the Reserve Bank plans to cut rates early next year if the recent lift in business confidence recedes or fails to translate into a lift in employment and investment in non-mining sectors.
“Forward-looking indicators of labour demand remained soft and the Bank's liaison suggested that employment intentions had been subdued in recent months, most notably in mining and mining-related sectors,” the minutes read.
However, the minutes showed that the RBA members present were confident the economy should pick up in the near future.
“The information to hand at the meeting was consistent with growth of economic activity remaining below trend over the next year or so before an expected pickup.”
While the RBA neither closed off the possibility of reducing rates further, nor signalled an imminent intention to reduce them, “the board would continue to examine the data over the months ahead to assess whether monetary policy was appropriately configured”.