Australians should be prepared for more interest rate increases:...

Australians should be prepared for more interest rate increases: RBA governor

Cecile Lefort
Reserve Bank of Australia governor Philip Lowe said he was committed to doing what is necessary to ensure that inflation returns to the 2 per cent to 3 per cent target range over time.

“High inflation damages the economy, reduces the purchasing power of people’s incomes and devalues people’s savings. It is also regressive, hurting most those who are least well equipped to protect themselves,” the governor said in a speech hosted by the American Chamber of Commerce in Australia (AmCham) and ANZ in Sydney on Tuesday.

Dr Lowe said medium-term inflation expectations had been well anchored at about 2 to 3 per cent, so far, suggesting that people believed we would get back to target. “We want to do what we can to make sure this remains the case.

“Australians should be prepared for more interest rate increases,” the governor said. “The level of interest rates is still very low for an economy with low unemployment and that is experiencing high inflation.

“How fast we increase interest rates, and how far we need to go, will be guided by the incoming data and the board’s assessment of the outlook for inflation and the labour market.”