The Reserve Bank’s rationale behind increasing interest rates for the first time in more than two years is set to be revealed in full.
The central bank on Tuesday will unveil the minutes from its most recent meeting in early February, when the board decided to raise the official cash rate by 25 basis points to 3.85 per cent.
It was the first time since November 2023 the Reserve Bank had opted for a rate hike and followed an uptick in inflation above its target band of between two and three per cent.
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While Reserve Bank governor Michele Bullock has since been questioned on the board’s decision at a press conference and two parliamentary hearings, the minutes are expected to shed more light on the factors that went into the call.
The minutes could support the message that further rate increases are in the pipeline, AMP chief economist Shane Oliver said.
“The minutes from the last RBA meeting will likely reinforce the RBA’s hawkish stance with more warnings that it will raise rates again if inflation data does not improve enough,” he said.
The board previously said inflationary pressures picked up in the second half of 2025 and were likely to linger throughout 2026.
“While part of the pick-up in inflation is assessed to reflect temporary factors, it is evident that private demand is growing more quickly than expected, capacity pressures are greater than previously assessed and labour market conditions are a little tight,” the board said.
Ms Bullock previously said a resurgence in inflation had forced the bank’s hand, with the speed of consumer spending and business investment catching the board off guard.
A statement from the bank’s monetary board at the time of the interest rate decision warned of uncertainties for the domestic policy.
“On the domestic side, if growth in demand is stronger than expected, and growth in the economy’s supply capacity remains limited, it is likely to add further to capacity pressures,” the statement said.
