The Reserve Bank of Australia (Central Bank) decided at a policy-making meeting on the 5th to raise the target for the official cash rate, which is the policy interest rate, from 0.85% to 1.35%. This will be the first time for the Bank of Australia to raise interest rates by 0.5 points for the second consecutive meeting.
“The Policy Board will take further steps in Australia’s financial normalization process in the coming months to ensure that Australia’s inflation rate gradually returns to target levels,” Rowe said in a statement released after the policy announcement. We are committed to the necessary actions. “
Inflation is expected to peak by the end of the year and fall again towards the 2-3% target range next year.
- Medium-term inflation expectations are well stable
- Watch data in determining the size and timing of rate hikes
Twenty-five of the 26 economists surveyed by Bloomberg expected a 0.5-point rate hike that day, with the remaining one expecting a 0.75-point rate hike.
In line with other major central banks that are actively tightening monetary policy to prevent inflation from becoming uncontrollable, the Australian central bank has also moved to raise interest rates three times since May this year, and the policy interest rate will be after May 2019. It became the highest in.
Hawkish Stance
Australia has hiked interest rates by 125 basis points this year
Source: Bloomberg
The Australian dollar has been weak even after the interest rate hike, rising 0.1% to US $ 0.6874 at 3:38 pm Sydney time (2:38 pm Japanese time). Australian government bond yields have narrowed.
Bank of Australia raises interest rate by 0.5 points for the first two consecutive meetings
Source: Bloomberg
“Today’s rate hike is a move to take the extraordinary financial support introduced to help the Australian economy prepare for the worst of the pandemic (of the new coronavirus),” said Rowe. And the accelerated inflation means that this special support is no longer needed. “
Original title:RBA Raises Interest Rates in Quickest Tightening on Record (2)、RBA’s Lowe Raises Benchmark Interest Rate to 1.35% (Full Text)、RBA Raises Key Rate to 1.35% as Expected by 25 of 26 Economists（抜粋）
(Replace exchange rates and update with more statements)