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The first interest rate hike in the last monetary policy tightening cycle was delivered in October 2009, when the cash rate rose by 25 basis points to 3.25 per cent.
Three months before that rate hike in July 2009, the RBA Governor, Glenn Stevens noted:
"output has been sluggish and capacity utilisation has fallen back to about average levels, with some further decline likely over the rest of the year. Weaker demand for labour is leading to lower growth in labour costs. These conditions should see inflation continue to abate over the period ahead.
A pick-up in housing credit demand suggests stronger dwelling activity is likely later in the year. House prices are tending to rise. Business borrowing, on the other hand, has been declining, as companies postpone investment plans and seek to reduce leverage in an environment of tighter lending standards.
Monetary policy has been eased significantly. Market and mortgage rates are at very low levels by historical standards, despite recent small increases. Business loan rates are below average. The effects of these changes will still be coming through for some time yet.
The Board's current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed."