It was appropriate for the Reserve Bank of Australia to leave the cash rate unchanged at the September meeting, minutes of its latest gathering showed. Members judged that recent data, August forecasts, and the degree of policy restrictiveness indicated no need for an immediate cut. They noted policy remained a bit restrictive but said the full impact of earlier easing was still filtering through the economy, reflected in stronger housing prices and credit growth. The board’s August rate cut had eased financial conditions, with lower bank funding costs, reduced lending rates, and smaller mortgage payments. The transmission of policy to financial conditions was broadly in line with prior easing cycles. Members discussed balanced risks to the outlook: consumption and capacity pressures could prove stronger than expected, while weak sentiment, soft employment, and slowing wage growth posed downside risks. The board stressed that future decisions would remain cautious and data-dependent.
