The Reserve Bank of Australia (RBA) left open the possibility it might cut interest rates further, minutes from its May 5 meeting showed, triggering a slump in the Australian dollar on Tuesday.
In the minutes from the meeting that saw the RBA cut rates to a record low of 2 percent, the central bank acknowledged that board members had agreed not to give guidance on future policy action at that time. But this does not limit its ability to adjust policy again at future meetings.
The Australia dollar fell to a session low of $0.7954 before rebounding to $0.7991. “Members agreed that…the statement communicating the decision would not contain any guidance on the future path of monetary policy,” the minutes said. “Members did not see this as limiting the Board’s scope for action that might be appropriate at future meetings,” it added.