Following are the key headlines from the February Reserve Bank of Australia (RBA) monetary policy statement, via Reuters, as presented by Governor Phillip Lowe.
Inflation is expected to decline this year due to both global factors and slower growth in domestic demand.
Board expects further increases in interest rates.
Board resolute in its determination to return inflation to target.
The central forecast is for cpi inflation to decline to 4¾ per cent this year and to around 3 per cent by mid-2025.
GDP growth expected to slow to around 1½ per cent over 2023 and 2024.
Path to achieving a soft landing remains a narrow one.
The labour market remains very tight.
Central forecast is for the unemployment rate to increase to 3¾ per cent by the end of this year and 4½ per cent by mid-2025.
Wages growth is continuing to pick up from the low rates of recent years and a further pick-up is expected due to the tight labour market and higher inflation.
Some households have substantial savings buffers, but others are experiencing a painful squeeze on budgets.
Household balance sheets are also being affected by the decline in housing prices.
Uncertainties mean that there are a range of potential scenarios for the australian economy.
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AUD/USD shoots to near 0.6950 as RBA hikes interest rate by 25 bps to 3.35%
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AUD/JPY jumps to 92.00 on RBA rate hike, ignores hawkish BoJ concerns, Japan intervention news
About RBA rate decision
RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.
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