Australia central bank sticks with slower rate hikes

Australia’s central bank on Tuesday stuck with a slower pace of interest rate rises for a second month while revising up its inflation outlook, saying more rate hikes would be needed as it struggles to keep the economy afloat while battling inflation.

Wrapping up its November policy meeting, the Reserve Bank of Australia (RBA) lifted its cash rate by 25 basis points to a nine-year peak of 2.85per cent, the seventh hike in as many months, reports Reuters.

It had surprised many in the markets last month by downshifting to a quarter-point rate hike following four consecutive moves of 50 basis points, citing an already substantial rise in rates.

Inflation is now expected to peak around 8per cent later this year, up from a previous forecast of 7.75per cent, and slow to a little above 3per cent in 2024, the RBA said.

That would still leave it above the central bank’s 2per cent to 3per cent target range.

RBA Governor Philip Lowe said in a statement that the central bank’s board was seeking to return inflation to the target range while keeping the economy on an even keel.