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MNI STATE OF PLAY: RBA To Keep Hiking in Inflation Battle

MNI (PERTH)
Perth (MNI)

The RBA has quickly hit its neutral rate, meaning policy will become more restrictive in coming months as inflation remains top of mind at Martin Place.

The Reserve Bank of Australia signalled a move into restrictive monetary policy territory over coming months after hiking rates by 50 bps to 2.35% and abandoning its language around the "normalisation" of policy as it finally closed in on its estimated neutral rate.

Tuesday's lift in the Official Cash Rate (See MNI STATE OF PLAY: RBA To Hike 50 As Inflation Stays Priority) to a near eight-year high marks the most aggressive monetary tightening since 1994, with a cumulative 225 bps of hikes since May showcasing the RBA's determination to bring inflation back to its 2-3% target range. The Bank's intent was underscored by a shift in language to its being "committed" to combating inflation from viewing it as a "high priority" in August.

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The Reserve Bank of Australia signalled a move into restrictive monetary policy territory over coming months after hiking rates by 50 bps to 2.35% and abandoning its language around the "normalisation" of policy as it finally closed in on its estimated neutral rate.

Tuesday's lift in the Official Cash Rate (See MNI STATE OF PLAY: RBA To Hike 50 As Inflation Stays Priority) to a near eight-year high marks the most aggressive monetary tightening since 1994, with a cumulative 225 bps of hikes since May showcasing the RBA's determination to bring inflation back to its 2-3% target range. The Bank's intent was underscored by a shift in language to its being "committed" to combating inflation from viewing it as a "high priority" in August.

Keep reading...Show less