The RBA minutes showed a split on decision to cut rates, with arguments for both easing and a policy "on the tight side of normal".
In the minutes from the Reserve Bank's November meeting, the RBA Board made an each-way case for the eventual cut. The Board argued that "policy settings on the tight side of normal" could be appropriate over the medium term. The Bank argued that high terms of trade and resources investment will eventually re-exert inflationary pressure, barring a "serious" global economic downturn.
However, the Bank also pointed to easing inflation and downside risks for the global economy. The Bank said CPI inflation was expected to fall significantly over the next few quarters, and that economic conditions in Europe were likely to worsen.
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