Aussie inflation eases despite market consensus of coming interest rate hikes

  • Business
  • Wednesday, 22 Oct 2003

CANBERRA, Australia (AP) - Inflation eased slightly in the three months to the end of September from the previous quarter, placing it almost in the middle of the central bank's preferred target range, according to official data released Wednesday. 

The Australian Bureau of Statistics said prices rose 0.6 percent in the September quarter from the previous three months, giving an annual inflation rate of 2.6 percent. 

In the previous quarter ending June 30, the annual inflation rate as measured by the bureau's consumer price index was 2.7 percent. 

The result was in line with financial market expectations, and puts the annual rate well within the Reserve Bank of Australia's target band of 2 percent to 3 percent. 

The central bank aims to keep inflation within that band by adjusting its benchmark interest rate, currently at 4.75 percent. 

In recent weeks surveys shows a majority of private sector economists believe the central bank will jack up its benchmark interest rate in coming months because of gathering strength in both the domestic and international economies. 

The statistics bureau said a stronger Australian dollar over recent months had reduced the price of imports and helped contain inflation. 

That was partially offset by rising petrol, property and beer prices. 

In trading late Tuesday, the Australian dollar burst through the 70 U.S. cent level for the first time since November 1997. - AP 

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