SYDNEY: Australia Treasurer Jim Chalmers says that signals by the country’s central bank that it had not stopped tightening policy were “pretty straightforward”.
The Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to a decade high of 3.35% on Tuesday and reiterated that further increases would be needed, a more hawkish policy tilt than many had expected.
“I accept that the board’s language was pretty straightforward in that regard,” Chalmers said in an interview with state broadcaster ABC, when asked whether the change in language by RBA governor Philip Lowe meant multiple rate rises were still to come.
He added that he did not want to pre-empt any future policy decisions by the RBA.
Australia is battling stubbornly high inflation, with a higher cost of living and continued rate hikes already starting to impact spending.
The treasury expects the economy to slow considerably as a result of higher interest rates as well as a global slowdown in growth, Chalmers said, though he ruled out the possibility of a recession.
“The expectation of the treasury forecasters is that higher interest rates combined with difficult global conditions will slow our economy considerably,” he said. — Reuters