RBA Interest Rate Rise Announcement, RBA Interest Rate Will soon Raise
RBA Interest Rate Rise – If inflation remains unrelentingly high, there is a possibility that the central bank of Australia would raise interest rates once more within the next two weeks. The minutes from the meeting of the Reserve Bank’s cash rate committee that took place at the beginning of the month revealed that the RBA was debating whether to maintain the current level of interest rates or to raise them by a quarter of a percentage point.
Although the board, now led by Governor Michele Bullock, finally chose the former option, it did so with the knowledge that quarterly inflation statistics will be published this month and will play a substantial role in the decision about interest rates that will be made in November.
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“Members observed that, prior to the November meeting, they would receive additional data on economic activity, inflation and the labor market, as well as a set of revised staff forecasts,” according to the RBA minutes released today.
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“In reaching their decision, members noted that some further tightening of policy may be required should inflation prove more persistent than expected.”The board has a low tolerance for an inflation rate that returns to target more slowly than currently expected.
Because of this, the answer to the question of whether or not there should be an additional increase in interest rates depends on the incoming data and how these change the economic outlook and the ever developing assessment of risks.
Two planned releases from the Australian Bureau of Statistics are significant amid that incoming data.
Prior to the release of the quarterly inflation figures on Wednesday next week, a labor force update, which includes the important measure of the unemployment rate, will be made available on Thursday.
Even while inflation has drastically declined since reaching a peak of 8.4% in December, last month’s figures showed a surprise increase from 4.9 to 5.2 percent in August. The RBA observed that rising oil costs were a major factor in that.
Over the previous few months, headline inflation had increased in a number of nations, including Australia, as a result of rising energy prices, it added. “Members discussed the recent increase in oil prices, which were almost 30 per cent higher than at the end of June… refined fuel prices had risen even more.”
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These observations were made before the commencement of warfare between Israel and Hamas, which caused a considerable change in the cost of fuel. Because of the increased potential for regional escalation, the analysts at ANZ Research anticipate that the price of a barrel of oil will quickly reach $100 USD.
They said in a research note that was released on Friday that although neither Israel nor Gaza is a large oil exporter, the danger to oil markets will increase if “the conflict broadens.”
Source: 9news.com.au