MNI BRIEF: Inflation Not Calendar Will Drive Rates, RBA's Lowe

Reserve Bank of Australia Governor Philip Lowe has tied any increase in interest rates directly to inflation outcomes and "not the calendar," in a speech today.

Speaking at the Economics Society of Australia, Lowe said a rate rise "depends on the data, not the date" and this was for inflation to be sustainably within the 2% to 3% target range. Inflation is now at 1.1%.

Lowe has previously said that the RBA does not expect conditions for a rate rise until 2024.

At this week's board meeting, the RBA maintained rates at the record low of 0.10%, maintained its yield target on April 2024 Government Bonds, and decided to decrease the rate of other bond purchases from AUD5 billion to AUD4 billion a week until November.

In today's speech Lowe said the change in the purchases "does not represent a withdrawal of support by the RBA."

"This represents a substantial and ongoing degree of support to the Australian economy," Lowe said.

"The adjustment in the rate of weekly purchases does not change this."