RBA Governor: "The Worst of Inflation Is Over"

"Additional Rate Hikes Needed to Lower Quickly"

Philip Lowe, Governor of the Reserve Bank of Australia (RBA), judged that "the worst is over" regarding inflation. However, he said additional interest rate hikes are necessary considering the still high inflation.

Governor Lowe appeared before Parliament on the 11th (local time) and assessed that Australia's recent economic situation is heading toward a soft landing, with the unemployment rate not rising sharply and inflation easing.

Australia's consumer price inflation peaked at 7.8% annually at the end of last year, the highest in 30 years, and fell to 6% last quarter. Governor Lowe said, "It is expected to decrease further over the next few quarters," and "We expect it to return to the target range of 2-3% by the end of 2025."

Governor Lowe said it is still too early to declare victory over inflation, but monetary policy is now in a 'restrictive zone,' and he hopes the RBA only needs to make slight adjustments to interest rates.

The RBA raised the benchmark interest rate from 0.1% starting in May last year to 4.1% by June, then held it steady in July and this month.

He explained, "Additional tightening measures may be necessary to bring inflation back to the target within a reasonable period," and if inflation is to be lowered to the target by next year, the benchmark interest rate needs to rise by at least 1 percentage point from the current level."

Philip Lowe, Governor of the RBA.
Photo by Reuters Yonhap News

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