The Reserve Bank of Australia (RBA) decided to moderate the pace of monetary tightening and raised the benchmark interest rate by 25 basis points, to 2.60%, according to a statement released on Tuesday (4) after a regular meeting of the institution.
The adjustment represents the sixth consecutive rise in interest rates in the country, amid the persistent escalation of Australian inflation.
The size of the increase, however, surprised most analysts, who had expected a new high of 50 basis points, as in the four previous meetings.
In the note, the RBA explains that the base rate has advanced “substantially in a short period of time” and that it has opted for a milder increase “while assessing the scenario for inflation and economic growth in Australia”.
In August, the country’s consumer price index (CPI) rose at an annual rate of 6.8%, after increasing 7% in July.
Despite this, the RBA expects further inflation to pick up in the coming months, before falling towards the 2% to 3% range.
“The expected moderation in inflation next year reflects the ongoing resolution of global supply-side problems, recent drops in the prices of some commodities and the impact of rising interest rates”, he says.
The monetary authority predicts that the CPI will be around 7.75% by the end of this year, just above 4% in 2023 and close to 3% in 2024.
The RBA highlights uncertainties in the global economy and signals that it will make further interest rate hikes in the coming months.
“The BC Council remains resolute in its determination to return inflation to the target and will do whatever is necessary to achieve it”, he guarantees.
Source: CNN Brasil
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