Australia Central Bank Rules Out Near Term Rate Cut On Inflation Risks

Australia interest rates not to be cut in 2023: RBA

Governor says core inflation still too high

No interest rate cuts this year, says RBA

The Reserve Bank of Australia (RBA) has ruled out the possibility of an interest rate cut this year, saying that core inflation is still too high.

In a speech on Tuesday, RBA Governor Philip Lowe said that the central bank is "committed to returning inflation to target" and that it will "do what is necessary" to achieve this.

The RBA has raised interest rates by 425 basis points since May 2022 in an effort to curb inflation. However, inflation remains above the RBA's target range of 2-3 per cent. Core inflation, which excludes volatile items such as food and energy, is currently running at 4.9 per cent.

Lowe said that the RBA is "closely monitoring" inflation and that it will "continue to assess the outlook and adjust policy as necessary".

The RBA's decision not to cut interest rates this year is likely to disappoint some economists. However, it is consistent with the central bank's commitment to returning inflation to target.