Bonds & Rates
Home›Bonds & Rates›Central Banks›RBA expected to lift rates to 4.60% in September
RBA expected to lift rates to 4.60% in September
The move is widely expected after Australia’s July CPI surprised higher, with monthly inflation at 1.0% versus 0.8% expectations and annual inflation at 3.5%.
FXStreet says the Reserve Bank of Australia is widely expected to raise the Official Cash Rate by 25 basis points to 4.60% from 4.35%, announced Tuesday alongside its Monetary Policy Statement.
The publication adds that the decision follows two prior meetings where the RBA kept rates unchanged, and that the Australian dollar could face a major reaction to the policy update and RBA Governor Michele Bullock’s press conference.
FXStreet points to elevated inflation as the key driver, citing July CPI with a 1.0% monthly increase versus 0.8% expectations, plus annual inflation staying at 3.5%. It also notes trimmed-mean inflation held at 3.6%, underscoring concerns that underlying price pressures remain persistent.
The outlet also highlights that the RBA has flagged risks including higher energy prices, the Middle East conflict, strong investment, and persistent domestic cost pressures. It further notes Australia’s Q2 GDP rose 0.4%, while the economy is losing momentum with annual growth at 2.1%.