RBA bashes the banks
THE Reserve Bank has partly blamed Australia’s private banks for creating conditions that risk pushing the nation into a “deeper and more persistent slowdown”.
The central bank’s board also seriously considered cutting interest rates when it met on August 5, according to minutes of the meeting released yesterday.
At the meeting, board members expressed concern that financial conditions in Australia were “clearly quite tight, and effectively getting tighter”.
The August meeting minutes confirm that board members were worried that conditions had been tightened too far, “given there had been a significant change in borrowing behaviour, confidence was weaker, asset prices had declined and slower overall growth was in prospect”.
The minutes also indicate that there was debate on whether to cut interest rates immediately.
The minutes signal that the Reserve board intends to start cutting rates next month. They say that without less restrictive conditions “the risk of a deeper and more persistent slowing in the economy would increase”.
Clear signal of rate cut? RBA had been working on slowing down Aussie economy in which they believed was the way to fight inflation. Now, the driver seems to be losing control of his vehicle…who to blame?