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Australia completes interest rate turnaround

cHey Singapore ⋅ A central bank governor stepped back very quickly: “I agree that the interest rate hike is coming earlier than the bank’s recommendations in the dark days of the epidemic,” Philip Lowe said on Tuesday. “In these unprecedented times, we felt that the economic damage to interest rates in Australia should be lower in the coming years. However, the economy is now showing more recession than we expected,” the Governor of the Federal Reserve of Australia added.

He has repeatedly promised not to expect a turnaround in interest rates by the end of 2024. However, on Tuesday, the Reserve Bank of Australia (RBA) raised the bar Policy ratio 25 basis points 0.35 percent – the first rise in a decade. The Australian dollar was up about 1 per cent at $ 1.4069. Analysts had predicted that interest rates would be 3.5 percent a year. The ASX stock index fell 0.5 percent. Consumer prices rose 5.1 percent in the first quarter, the fastest in 20 years. At 3.7 percent, headline inflation was higher than the RBA-specified inflation path. Lowe’s conclusion is clear: “I think further interest rate hikes are needed in the coming months.” In the medium term, “the key interest rate is unlikely to rise to 2.5 percent.” The central bank wants to have securities worth $ 350 billion (23 235 billion) matured instead of being sold like other central banks.