RBA Considered Three Options for Size of Interest-Rate Hike By Bloomberg

(Bloomberg) — Australia’s central bank said it considered three options for the size of its first interest-rate increase since 2010, according to minutes of its May 3 policy meeting, when it raised the cash rate by 25 basis points.

The board agreed that hiking by 15 basis points, as forecast by most economists, didn’t make sense given policy was very stimulatory and it was highly probable further rate rises would be required, the Reserve Bank said.

It acknowledged an argument could be made for 40 basis points before opting for 25 basis points to signal a return to normal operating procedures following the pandemic, the minutes showed Tuesday.