Reserve Bank board members noted consumers have had little reaction to interest rate cuts in June, July and October, but also acknowledged the nation’s spending freeze could in part be down to a routine lag in monetary policy.
Minutes from the RBA’s monthly meeting on December 3 showed board members noted monetary policy had “long and variable lags” and that indebted consumers may take some time before increasing their spending in response to three 0.25 per cent rate cuts over the past six months.
The board left the cash rate unchanged at 0.75 per cent this month to allow Christmas and New Year spending activity to filter through before considering the possibility of a cut to 0.5 per cent at its next meeting in February.
AAP
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