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Australia central bank sees inertia in domestic wages, inflation -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – Pedestrians pass the main entrance of the Reserve Bank of Australia’s (RBA), head office in central Sydney on October 3, 2016. REUTERS/David Gray/File Photo

SYDNEY, (Reuters) – Australia’s central banking board believes that a rate rise will not be necessary until 2024 due to inertia and home-grown inflation. However, financial markets are pricing in a change as soon as June next year.

On Tuesday, the Minutes of Australia’s Reserve Bank of Australia’s November Policy Meeting were released. They showed that after an unexpectedly strong reading of third quarter consumer prices, the Board thought inflation risk had increased.

But policymakers predicted that Australia would see lower inflation than other nations. They also maintained the same central scenario, with the cash rates remaining the same until 2024.

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