Australia Reserve Bank’s Cash Rate Decision to Dominate Agenda
The Reserve Bank of Australia is expected to announce its 10th interest rate increase this week. Mortgage owners will be likely to see an extra boost in their monthly repayments.
After the February decision, communications from the central bank suggested that the bank had adopted a more hawkish tone. This indicated that the bank was becoming impatient with rising inflation.
When the board meets on Tuesday, this would increase the cash rate to 3.35 percent from 3.6%.
It is still highly debated where the final resting spot for this round in policy tightening will be. Market pricing remains at its highest point in the low-fours, while economists predict another one to two increases.
Both December quarter growth and wage data came in lower than anticipated since the February decision.
Also, the monthly consumer price index fell to 7.4% in January, compared to 8.4 percent in December.
While the monthly indicator is relatively new and considered volatile, Australian Treasurer Jim Chalmers said inflation had likely passed its peak.
A speech given by Philip Lowe (RBA governor) at Wednesday’s AFR Business Summit will give insight to the March decision.
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