Australia’s central bank edges closer to interest rate hike

SYDNEY (XINHUA) – The Reserve Bank of Australia (RBA) has given its strongest indication yet that an interest rate hike may be imminent.

In minutes of the RBA’s April meeting released yesterday, board members noted that an anticipated rise in inflation ‘has brought forward the likely timing of the first interest rate hike’.

“For some time, the board had communicated that it wanted to see evidence that inflation was sustainably within the 2-3% target range before raising interest rates,” the lawsuit says. -verbal.

“Over the coming months, significant additional evidence will become available on both inflation and labor cost developments,” the RBA said, adding that the board “agreed that it would be appropriate to assess this evidence and other incoming information” regarding rate changes.

Some of Australia’s major banks, noting the country’s current economic strength, have already predicted that a rate hike could occur well ahead of the RBA’s original intentions.

A man walks past the Reserve Bank of Australia in Sydney. PHOTO: AP

Commonwealth Bank of Australia’s chief economist, Stephen Halmarick, said earlier this month that the “more robust economic picture” was “in line with our expectations of an RBA rate-hike cycle set to begin. in June, although we expect this cycle to be relatively shallow.” .

Overall, the RBA confirmed that Australia’s economy was “resilient” despite global and domestic supply shocks caused by the war in Ukraine, the Omicron outbreak and widespread and repeated flooding along the east coast of the country.

“The strength of the Australian economy was evident in the labor market,” read the minutes.

“Unemployment and underemployment rates were at their lowest levels in many years and forward-looking indicators of labor demand remained strong.”

Noting the four per cent unemployment rate, the RBA expected further strengthening in overall wage growth and broader measures of labor costs.

In other international economic observations, the RBA said the Ukraine crisis was likely to trigger “volatile” and unpredictable global commodity prices “at a time of strong demand as the global economy recovers from the coronavirus pandemic. COVID-19″.

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