August rate cut hopes dampened by RBA minutes MORTGAGE holders and businesses hoping for a pre-election interest rate cut should take a cold shower today following release of the minutes from the Reserve Bank of Australias July meeting, which suggested the falling Australian dollar was doing enough for the time being to stimulate the economy. The Australian dollar leapt more than half a US cent to a high of US91.7 cents immediately after release of the monthly document, which outlines the decision-making process behind the RBA's move to leave the official cash rate unchanged at the record low level of 2.75 per cent earlier this month. "Given the exchange rate adjustment that was occurring, and with the substantial degree of monetary stimulus already in place, members assessed the current stance of policy to be appropriate for the time being," the minutes concluded. The RBA's board members noted that Australia's inflation outlook would be "slightly higher because of the exchange rate deprecation." The Reserve Bank's nine members, including Governor Glenn Stevens and Deputy Governor Philip Lowe, observed the Australian resource boom was "close to, if not past, its peak" but noted the 12 per cent fall in the Aussie dollar since April had helped cushion local miners from the full impact of falling global commodity prices and should help boost competitiveness for local manufacturers. "The effects of lower interest rates were apparent across a range of indicators and, given the lags involved in the transmission of monetary policy, this process had further to run," the minutes noted. The board, which ordinarily meets 11 times a year to consider the official level of interest rates, said it was too early to tell whether China's economy, whose growth rate slowed to 7.5 per cent in the three months to the end of June, would be permanently harmed by an emerging credit crunch. Worries about China's economy had helped fan anticipation for an August interest rate cut, which traders put a 64 per cent probability on until today. Although the minutes neutered expectations for a rate cut in early August, the market stills expect one more cut before Christmas.