Have any questions:


Mail to [email protected]

RBA Signals Further Rate Hikes Dependent on Data Results

In: Finance, Forex

Australia’s central bank signaled further interest-rate increases would come in the period ahead, while restating it will be guided by incoming economic data and the inflation outlook.

Minutes of the Reserve Bank’s Aug. 2 policy meeting released on Tuesday showed: “The board expects to take further steps in the process of normalizing monetary conditions over the months ahead, but it is not on a pre-set path.”

The RBA has given itself some wriggle room to adjust the pace of tightening after three consecutive 50 basis-point hikes took the cash rate to 1.85%. Even so, most economists still expect the bank will raise interest rates by another half-percentage point next month before easing back to more traditional quarter-point moves.

The RBA has joined global counterparts from Washington to Wellington in rapidly tightening policy to try to prevent consumer prices from spiraling out of control. Headline inflation in Australia is running at more than twice the top end of the central bank’s 2-3% target.

Consumer confidence has weakened as households grapple with higher mortgage repayments and rising cost of living pressures. The RBA has signaled it’s trying to get the cash rate up to around 2.5%, or a neutral level, while money markets are pricing in 3.25% by the end of the year.

There are early signs of easing retail demand as house prices decline, with internal data from major banks pointing to a cooling in spending trends.

The RBA nonetheless expects domestic demand to hold up in the period ahead, underpinned by very low unemployment and savings built up during the pandemic.

How Can We Help You?

Need  to start your trading career with us today, or just looking for more information about our services?

For any inquiries please fill out the form below and we will get back to you!

Open chat
💬 Need Help?
Hello 👋
Do you need any help?