Path to achieving a soft landing for the economy remains narrow, Reserve Bank of Australia says as it lifts cash rate again
-
Loading... - Shriki Ahmed
- 07 Feb 2023
- 59 Views
- 0 Like
- 0 Comment
The Reserve Bank of Australia (RBA) has lifted its cash rate by 25 basis points to 3.35%, noting the path to achieving a soft landing for the economy "remains a narrow one" against the backdrop of Australia's highest inflation since 1990. It says more interest rate hikes will be needed.
The Australian Consumer Price Index (CPI) rose 7.8% in the 12 months to the December 2022 quarter, the highest it has been since 1990. The RBA's inflation target is keeping consumer price inflation in the economy at 2% to 3%, on average, over the medium term. The RBA acknowledges it'll be "some time" before inflation is back to its target, but says it "remains resolute in its determination to return inflation to target and will do what is necessary to achieve that."
The RBA started increasing its cash rate, from a low of just 10 basis points, in May last year.
"In underlying terms, [December quarter] inflation was 6.9%, which was higher than expected. Global factors explain much of this high inflation, but strong domestic demand is adding to the inflationary pressures in a number of areas of the economy," the RBA says. Read More…
