RBA Governor Philip Lowe said in a speech that further rate hike is still necessary. But the central bank is now closer to the point of a pause.
The board’s judgment remained that “further tightening of monetary policy is likely to be required to bring inflation back to target within a reasonable timeframe”, Lowe said.
“Inflation is still too high and while it looks to be on a declining path it is likely to remain higher than target for a few years,” he added. “If we don’t get inflation down fairly soon, the end result will be even higher interest rates and more unemployment.
Meanwhile, ” with monetary policy now in restrictive territory, we are closer to the point where it will be appropriate to pause interest rate increases to allow more time to assess the state of the economy,” he noted.
“At what point it will be appropriate to pause will be determined by the data and our assessment of the outlook”.
