RBA says current forecasts do not predict inflation returning sustainably to the target midpoint of 2.5 percent until 2026.
Despite government rejoicing over the 2.8 percent inflation rate milestone, the Reserve Bank of Australia (RBA) continues to signal caution.
In its latest review on Nov. 5, the RBA decided to keep the cash rate target unchanged at 4.35 percent and the interest rate on Exchange Settlement balances steady at 4.25 percent, indicating concerns over underlying inflationary pressures that persist despite a notable CPI decline.
Internationally, many central banks have eased monetary policies as inflation is stabilising. However, they remain wary of risks to both inflation and labour markets.
The RBA says it remains committed to achieving inflation targets sustainably, viewing this goal as its top priority.
“While headline inflation has dropped, underlying inflation remains concerningly high,” the bank said its post review meeting statement.
It further said it will continue to rely on evolving data to guide its policy decisions, paying close attention to global economic trends, domestic demand, inflation, and labour market conditions.
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