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- RBA’s Lowe: Some further tightening required to ensure inflation returns to target within reasonable timeframe
RBA’s Lowe: Some further tightening required to ensure inflation returns to target within reasonable timeframe
Early Friday morning in Asia, Reserve Bank of Australia (RBA) Governor Philip Lowe and a few Deputy Governors appeared before the House of Representatives Standing Committee on Economics.
Among the top-tier statements, RBA Governor Philip Lowe’s defense of the tighter monetary policy gained major attention as the Aussie central banker said, per Reuters, “It is possible that some further tightening of monetary policy will be required to ensure that inflation returns to target within a reasonable timeframe.”
The policymaker also refrained from cheering the victory on inflation while adding that things are in the right direction.
Key statements
The Australian economy is currently experiencing a period of below-trend growth and this is expected to continue for a while yet.
The central scenario is that economic growth remains subdued for the rest of this year before gradually picking up to around 2.25% by the end of 2025.
We expect employment to continue to grow but below the rate of growth in the labor force.
Our central forecast is for CPI inflation to be around 3.25% by the end of next year and to be back within the 2–3% target range by late 2025.
Market reaction
The news fails to move a needle on the AUD/USD price as the quote remains pressured near 0.6515 by the press time, holding lower grounds at the weekly bottom after a volatile day.
Also read: AUD/USD: Strong yields keep bears hopeful of testing 0.6480 support, US data eyed
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