The minutes from the final meeting, presided over by the recently retired Reserve Bank Governor, Philip Lowe, have sounded more warnings about potential interest rate rises. They also expanded on previous statements about the health of the Chinese economy.
The minutes indicated that further interest rate increases might be necessary if inflation remains stickier than expected. It noted that policy settings were considered for further tightening in a meeting earlier this month.
"Members noted that some further tightening in policy may be required should inflation prove more persistent than expected," the minutes stated. "In assessing the need for such a move, members affirmed that they will be guided by the incoming data."
This message aligns with recent statements from other central banks, including the Federal Reserve and the Bank of England, which are expected to address rate rises soon.
Inflation pressures are on the rise, driven by higher fuel prices, particularly petrol and oil. The question remains when central banks will react to this energy-driven burst of inflation.
Regarding possible risks to inflation, the minutes pointed to rising petrol prices and warned that the process of returning inflation to the desired range could be "uneven."
However, the RBA expressed confidence that the Australian economy is on a "narrow path" to achieving the desired 2% to 3% inflation target over time, while employment growth continues. The official cash rate was left unchanged at 4.10% for the third consecutive month in the September 5 meeting.
Governor Lowe, in his final statement, mentioned concerns about the health of the Chinese economy, and the minutes elaborated on this statement.
"The outlook for the Chinese economy had also become more uncertain over the prior month, and there were several channels through which this could affect Australia," the Australian central bank said.
"Conditions in [China's] property market had deteriorated further, and other indicators had remained soft... Financial stress among developers and further defaults posed a risk to economic activity," the RBA said, noting that "the downside risks to the Chinese economy had increased."
"China’s shadow banking sector also has significant exposures to the property sector, and a large financial services provider had missed payments on several trust products in August.
"Authorities had made some adjustments to policies in response to the stress, including further easing home buyer purchase restrictions and extending some existing support measures, but these had not yet had a discernible effect.
"The People’s Bank of China had eased monetary policy a little further in August (and in September) in response to slowing economic activity.
"Chinese Government bond yields had declined, and the Chinese renminbi had depreciated to its lowest level since late 2022. Members noted that authorities in China had stepped up their efforts to limit the speed of exchange rate depreciation and deter speculation in the currency."