Rationale behind RBA's December rates call on show

The RBA board, led by Michele Bullock, will release minutes from its last cash rate decision. (Lukas Coch/AAP PHOTOS)

Australia's central bank left interest rates on hold at the final meeting of the year and the logic behind that call will be laid out in the minutes.

Scheduled for release on Tuesday, the minutes from the Reserve Bank's December meeting will likely be the last communication from the central bank until the board assembles again in February.

The RBA has increased interest rates by 425 basis points since May last year in a bid to bring down still-high inflation.

The tightening cycle has made servicing a variable rate mortgage much more expensive and the pressure on households is clear.

National accounts data released by the Australia Bureau of Statistics after the last cash rate meeting showed the economy stalling over the September quarter, with household consumption flat.

RBA headquarters Sydney
The RBA has increased interest rates by 425 basis points since May last year.

Commonwealth Bank's head of Australian economics Gareth Aird said the economy was slowing more quickly than the RBA was anticipating, based on its most up-to-date forecasts.

In a note, he said the minutes would likely show the board debating the case to lift the cash rate or keep it on hold.

"But ultimately we think the decision to leave the cash rate on hold in December will have been a straightforward one," Mr Aird said.  

"The recent data rubber stamps that was the correct policy choice."

There will be few major data releases in the wind down to the end of the year, but the ABS will release finance and wealth statistics on Thursday.

Local investors will digest comments from Federal Reserve Bank of New York president John Williams, who said it was too soon to be talking about rate cuts.

The US S&P 500 lost 0.36 points, or 0.01 per cent, to 4,719.19 on Friday, but still notched its seventh straight week of gains.

The Dow Jones Industrial Average rose 56.81 points, or 0.15 per cent, to 37,305.16, while the Nasdaq Composite added 52.36 points, or 0.35 per cent, to 14,813.92.

Australian futures fell 74 points to 7381.

Local shares rose for a sixth straight day as the market produced its second-best week of the year.

The S&P/ASX200 index on Friday finished up 64.8 points, or 0.88 per cent, to 7,442.7, while the broader All Ordinaries rose 62.5 points, or 0.82 per cent, to 7,661.9.

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.


Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
AU$10
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
AU$5
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
AU$99
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

SEVEN DAYS FREE
Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store