Reserve Bank of Australia Governor: "Interest Rates Unlikely to Rise Before 2024"

Philip Lowe, Governor of the Reserve Bank of Australia [Photo by EPA Yonhap News]

[Asia Economy Reporter Byunghee Park] Philip Lowe, Governor of the Reserve Bank of Australia (RBA), reaffirmed his stance that the benchmark interest rate will not be raised before 2024, Bloomberg reported on the 10th (local time).

In a speech at a business conference that day, Governor Lowe said, "In the past two weeks, there have been market expectations that the RBA will raise the benchmark interest rate as early as the beginning of next year and further increase it in 2023," adding, "This differs from the outlook shared by the RBA."

Recently, as expectations of an interest rate hike in Australia have emerged in the financial markets, the Australian dollar has strengthened and Australian government bond yields have risen. In response, the RBA has increased bond purchases over the past few weeks.

Governor Lowe emphasized that for the precondition of an interest rate hike?full employment?to be met, the unemployment rate must approach 4%, stating that unemployment is a significant issue and that full employment is a high priority.

He also said that to reach the RBA's inflation target, wage growth must exceed 3%, while the current wage growth rate is only 1.4%, the lowest ever recorded. He stated, "There is still a long way to go to reach the wage growth rate consistent with the inflation target."

Governor Lowe mentioned that the possibility of further extending the quantitative easing policy by the end of this year will also be reviewed.

The RBA introduced a quantitative easing policy last November, purchasing AUD 100 billion worth of bonds over six months. Last month, the RBA extended the quantitative easing policy and announced that after the first phase ends at the end of April, it will purchase an additional AUD 100 billion in bonds.

After Governor Lowe expressed his stance on monetary policy that day, the Australian dollar weakened and Australian government bond yields fell.

This content was produced with the assistance of AI translation services.