Australia’s central bank acknowledges rate hikes are cooling inflation but flags upside risks and weak productivity as reasons to keep tightening options open.
The Reserve Bank of Australia confirmed its current monetary policy stance is restrictive and effectively curbing inflation, according to recent remarks. Three rate increases this year have achieved their intended impact, though officials remain cautious about declaring victory prematurely.
Assistant Governor Chris Kent highlighted persistent upside inflation risks, weak productivity growth, and elevated equity valuations as factors that could warrant further tightening. The RBA’s tone aligns with Governor Michele Bullock’s earlier warnings, reinforcing a hawkish bias despite progress on inflation.
Markets interpreted the comments as marginally supportive of the Australian dollar, with no immediate shift in policy expectations but a clear signal that rate hikes remain on the table if risks materialize.