RBA says gradual rate increases appropriate for inflation risk

“Members concurred that the appropriate course was to set policy as required by the most likely outcome, and to be ready to respond to other outcomes if they eventuated,” central bank officials said in minutes released Tuesday in Sydney of their March 2 meeting.

Governor Glenn Stevens is the first Group of 20 policy maker to raise borrowing costs this year after boosting the overnight cash rate target two weeks ago by a quarter percentage point to 4 percent. Traders trimmed bets on the timing of future increases after Reserve Bank of Australia officials said they judged it appropriate to move borrowing costs “gradually towards more normal levels” as the economy expands.

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