Australia’s central bank says rate rises needed to stop inflationary cycle
Jul 19, 2022 at 11:13 pm GMT
SYDNEY, July 20 (Reuters) – Australia’s top central banker on Wednesday reiterated that further interest rates rises would be needed to stop an inflationary cycle developing, as the bank faces the first independent inquiry into its operations since the 1990s.
In a speech at a business conference in Melbourne, Reserve Bank of Australia (RBA) Governor Philip Lowe said it was crucial that high inflation not feed through to business and household expectations. He suggested rates might need to rise to a neutral level of at least 2.5%, from the current 1.35%.
The warning comes as the newly elected Labor government released details of a long-planned review of the central bank looking into its Board structure, operations and methods of communications with the public.
Reporting by Wayne Cole; Editing by Himani Sarkar