The Strategist

Bank of Australia signals new rate hikes

09/16/2022 - 11:08

Governor of the Reserve Bank of Australia (RBA), Philip Lowe, hinted at future interest rate increases. However, he added that the rate of increases will eventually have to slow down.

Martin Howard
Martin Howard
Given the uncertainty surrounding the global economy, inflation expectations, and household spending, Lowe said in a statement on the economy to the parliamentary committee that the RBA's policy is not predetermined. The Australian central bank, according to him, is getting close to the point where it won't need to hike interest rates by 50 basis points anymore.

The RBA is getting close to a normal interest rate setting, according to Lowe, and his board will decide whether to hike rates by 50 or 25 basis points at its next meeting.

In an effort to rein in spiraling inflation, the RBA has increased its benchmark rate by 225 basis points in only five months, to a seven-year high of 2.35%.