Money in Australia
Australia - Money
RBA raises rate in November; hints at further hikes ahead
At its monetary policy meeting on 1 November, the Reserve Bank of Australia (RBA) hiked the official cash rate (OCR) from 2.60% to 2.85%. The decision matched market expectations.
The Bank raised rates again in a bid to keep inflation expectations anchored and tame inflation, which is being fueled by both external and domestic factors. Global economic conditions, faster wage growth and strong domestic demand continue to exert upward pressure on prices. The Bank expects inflation to peak at around 8.0% in Q4—increasing further from Q3’s over three-decade high—and then decline in 2023, thanks to easing global supply-side bottlenecks, stabilizing commodity prices and cooling domestic demand also due to higher interest rates. Inflation is seen averaging around 4.8% in 2023 and around 3.0% in 2024.
The Bank maintained a hawkish tone in its communiqué, stating that it “expects to increase interest rates further over the period ahead”. However, it reiterated that future monetary policy decisions will be guided by data and the evolving outlook for inflation and the labor market.
Commenting on the decision, Robert Carnell, economist at ING, stated:
“It looks more probable now that the RBA will simply stick to a 25bp rate increase pace until it believes it has taken rates high enough. That may be soon into the New Year when rates hit 3.35% or 3.6%, which they will do by January or February if we get further 25bp hikes at each meeting until then.”
The next monetary policy meeting is scheduled for 6 December.
FocusEconomics panelists are still adjusting their forecasts in light of the Reserve Bank of Australia’s latest decision.
Australia - Money Data
|Money (annual variation in %)||13.7||8.2||8.9||2.3||22.1|
5 years of economic forecasts for more than 30 economic indicators.
Australia Money Chart
Source: Reserve Bank of Australia and FocusEconomics calculations.
|Bond Yield||1.37||1.47 %||Dec 31|
|Exchange Rate||0.70||0.05 %||Dec 31|
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December 2, 2022
Retail sales fell 0.2% in month-on-month seasonally-adjusted terms in October, contrasting September’s 0.6% increase. Looking at the details of the release, department store sales, household goods retailing, and clothing and footwear sales contracted, as did cafes, restaurants and takeaway food services sales.
November 17, 2022
Seasonally-adjusted employment increased by 32,200 in October, following 3,800 jobs shed in September.
November 9, 2022
The Westpac-Melbourne Institute consumer sentiment index decreased to 80.0 in November from 83.7 in October.
November 9, 2022
The business confidence index produced by National Australia Bank (NAB) dropped to 0.2 in October from 4.5 in September.
November 4, 2022
Retail sales expanded 0.6% in month-on-month seasonally-adjusted terms in September, matching August’s increase. Looking at the details of the release, food retailing and clothing and footwear sales expanded, as did cafes, restaurants and takeaway food services sales.