Australian Treasurer Jim Chalmers has stopped short of criticising the Reserve Bank of Australia’s split-decision to keep interest rates on hold, but acknowledged it was a surprise for Australians and financial markets.
“It’s not the result millions of Australians were hoping for or what the market was expecting,” he said in a statement.
Addressing a news conference, Chalmers said the decision not to cut the official cash rate by 25 basis points, as was widely expected, was a surprise to the market and “to almost every economist who's expressed a view in recent days and weeks”.
“Those are facts. It's not for me to second guess the decisions that the Reserve Bank takes appropriately and independently,” he said.
Referring to the fact that the RBA’s Board was split on the vote with six votes in favour of not changing rates and three opposed, Chalmers said it “would be a source of some interest” if it was not unanimous.
He welcomed the transparency of the RBA publishing the unattributed votes for the first time and RBA Governor Michele Bullock answering questions from the media after the decision was announced.
The Treasurer said the fact that the Board was divided in view was a signal that monetary policy decisions were deliberated and debated properly.
“It's a good thing to have people around the table that will tease out and contest the views, whether it's of the Reserve Bank staff or the governor or others,” Chalmers said.
In his statement, the Treasurer said Australia had made substantial and sustained progress on inflation which was why interest rates had already been cut twice in five months this year.
“We’ve seen elsewhere that when central banks cut rates, they don’t always cut at every meeting,” he said.
“The RBA has indicated the direction of travel on inflation and interest rates has been established.”
