CIO

Rates will rise if financial trends hold: RBA

The Reserve Bank of Australia has flagged an increase in interest rates if the international economy continues at its current trajectory.

The minutes of the RBA's October board meeting, released today, indicate that the board considered raising the cash rate above the current 4.5% this month.

The reasons for and against a rate hike are currently “finely balanced,” the minutes say, but the board ultimately decided not to raise the rate as it would effectively be pressuring financial conditions at the margin.

But signs of slow credit growth, the near-parity Australian dollar and a still uncertain international outlook may force an increase in interest rates soon, the minutes state.