Fifty Basis Point Central Bank Rate Hike in Australia
September 6, 2022
The Reserve Bank of Australia’s Official Cash Rate, as expected, has underwent its fourth straight monthly half percentage point increase. At a 7.5-year high of 2.35%, the new OCR level compares to 0.10% prior to an initial 25-basis point move in early May. A released statement from RBA Governor Lowe projects a further rise of inflation in the second half of 2022 and identifies a need for additional interest rate hikes in order to return inflation to the top of its 2-3% target by 2024. That said, there is a hint that the pace of rate hikes going forward may taper:
The Board expects to increase interest rates further over the months ahead, but it is not on a pre-set path. The size and timing of future interest rate increases will be guided by the incoming data and the Board’s assessment of the outlook for inflation and the labor market.
Australian CPi inflation has accelerated from 1.1% in the first quarter of 2021 to 6.1% last quarter and is expected to approach 8% later this year.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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