The Governor of the Reserve Bank of Australia (RBA), Phillip Lowe, held a press conference following the central bank’s monetary policy decision announced on Tuesday.
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The performance objective has been effective and has supported the recovery of the Australian economy.
But its effectiveness as a monetary policy tool declined as expectations about future interest rates changed due to the course of the data and the anticipated progress towards our goals.
I want to make it clear that this decision does not reflect the view that the cash rate will increase before 2024.
There is genuine uncertainty as to the timing of future cash rate adjustments.
It is still entirely possible for the cash rate to remain at its current level until 2024.
Our future orientation is based on the state of the economy, not the calendar.
The latest data and forecasts do not justify an increase in the cash rate in 2022.
We will include the April 2024 bonus in our regular auctions starting next week.
That core inflation reached the midpoint of the target range for the first time in seven years does not, by itself, justify an increase in the cash rate.
The inflation and wage growth setup allows the board to be patient with rising interest rates.
The Board considered that it was no longer sustainable to maintain the 10 basis point target.
We are prepared to look through the spikes in the inflation rate.
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