ALBAWABA – Australia’s central bank stated Tuesday that previous hikes were “working” for now and announced another pause on Australian interest rate hikes in August, Agence France-Presse (AFP) reported.
This is the second consecutive pause in the central bank’s hikes cycle, with the key Australian interest rate at 4.1 percent.
Central bank governor Philip Lowe maintained there is no need for more hikes at the moment but warned things may change in the future, according to AFP.
Lowe said inflation in Australia – which sits at 6.0 percent – is "declining but is still too high", with rents rising, below-trend growth and weak household consumption.
Holding the rate will "provide further time to assess the impact of the increase in Australian interest rates to date and the economic outlook", he said.
Inflation was expected to return to the bank's target of 2-3 percent by late 2025.
This "remains the board's priority", the governor said.
Central banks raise rates to make borrowing more expensive, reducing buying power and demand of consumers and businesses, which usually pushes prices down.
Many other central banks have been tightening monetary policy in recent months in an attempt to soften food and energy prices.
The US Federal Reserve increased its benchmark lending rate in July. But New Zealand left its key rate unchanged last month following a number of hikes.
