\n
![](\"https:\/\/www.apimagazine.com.au\/media\/1001671\/shutterstock_2112720047-ukraine.jpg\")
<\/p>\n [ad_1]
\n<\/p>\n
The RBA has stoically sat tight on official interest rates since November 2020 and it seems only war or another pandemic variation can shake their commitment to sitting tight for a while longer yet.<\/p>\n
The Reserve Bank of Australia (RBA) has not lifted interest rates for 135 months, or more than 11 years, and in doing so has further cemented its international record for the length of time a major central bank had gone without a raise.<\/p>\n
In keeping the official cash rate at 0.1 per cent for a fifteenth consecutive month, it may look like the burghers of the RBA are on autopilot.<\/p>\n
But the decision on 1 February to hold rates steady<\/a> yet again took more than 4,000 words of RBA Monetary Policy Meeting\u00a0Minutes (published on 15 February) to be reached.<\/p>\n Inflation that is still not persistently in the 2 to 3 per cent target band and wages that remain largely stagnant ensured the RBA Board erred on the side of patience.<\/p>\n Unless war erupts in Ukraine drawing Russia and the west into extended conflict and a trade freeze, the Board seems determined to ignore soaring house<\/a> and rent prices<\/a> and hold rate steady for at least another six months.<\/p>\n \u201cWhile inflation had picked up, members agreed it was too early to conclude that it was sustainably within the target band,\u201d the minutes released on Tuesday noted.<\/p>\n \u201cThere were uncertainties about how persistent the pick-up in inflation would be as supply-side problems were resolved.<\/p>\n \u201cWages growth also remained modest and it was likely to be some time before aggregate wages growth would be at a rate consistent with inflation being sustainably at target.<\/p>\n \u201cThe Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve.\u201d.<\/p>\n War and words<\/strong><\/p>\n The great unknown is outside the control of the RBA and beyond reach of Australian Government policy.<\/p>\n If Ukraine was to be attacked by Russia, as the US\u2019 Biden administration insists is inevitable and imminent, global energy prices would soar and supply of a third of the world\u2019s wheat and barley and a quarter of corn exports would likely cease.<\/p>\n The resultant inflation on a global scale could force the RBA\u2019s hand.<\/p>\n China\u2019s refusal to criticise or challenge Russia is even fuelling speculation that the distraction in Europe could lead to action against Taiwan, which, although at longer odds, would wreak absolute havoc with the RBA\u2019s 4,204 carefully crafted and nuanced words.<\/p>\n The minutes noted the unemployment rate was at its lowest level since 2008 and underlying inflation was in the middle of the two to three per cent target range for the first time since 2014.<\/p>\n \u201cSince November 2021, better-than-expected progress towards the Board’s goals had been made \u2026 and the achievement of the goals was within sight for the first time in several years,\u201d the minutes noted.<\/p>\n The RBA didn\u2019t name names when it came to the prospect of international conflict but did hint at the downside risks presented by \u201cthe complexity of medium-term policy challenges in China\u201d and the \u201cincrease in geopolitical tensions.\u201d<\/p>\n