The Reserve Bank of Australia raised interest rates by 0.25% to 2.60%, compared to market expectations, which indicated a 50 basis point increase at the bank’s meeting, which was held this morning, Tuesday, October 4th.
The Australian Bank raised interest rates by 50 basis points for four consecutive meetings, the last of which was last August, and therefore the decline in the amount of the hike came as a shocking step for the markets, as the Bank indicated that the board is evaluating the expectations of inflation and growth in this period.
The interest statement issued by the bank stated that the bank is committed to returning inflation to the bank’s target range of 2-3%, stressing that there are strong increases in interest rates in the coming period.
The bank expects inflation to rise to 7% this year before falling to levels just above 4% next year and falling to 3% in 2024. The Bank expects that there will be strong increases in interest rates in the coming period, which will be determined and their timing through incoming economic data and the Board of Directors’ assessment of inflation and labor market expectations.
The reaction of the Australian dollar came negative after the bank surprised the markets, to retreat against the American dollar by about 50 pips, to test 0.6454 levels, before rising now and trading at 0.6545 levels, taking advantage of the US dollar’s declines.
02/11/2024
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