Sharjah24 – AFP: Australia's central bank will not raise interest rates from record lows in 2022, but an increase the following year is now "plausible", the bank's governor said Tuesday.
The Reserve Bank of Australia (RBA) kept borrowing costs on hold at 0.1 percent at a regular policy meeting but dropped a bond yield target, signalling rates could now rise earlier than the previously expected 2024.
It comes as other central banks across the globe have recently tightened policy to cool soaring prices and still more are considering following suit.
RBA governor Philip Lowe said a rate hike was now "plausible" in 2023, after inflation picked up but remained low at 2.1 percent.
The bank now expects inflation to grow gradually before reaching 2.5 percent in 2023, which is still within its inflation target of 2-3 percent.
Central banks in Brazil, Singapore, South Korea and New Zealand have all increased borrowing costs recently.
The RBA has predicted the country's economy will expand by about 5.5 percent next year and around 2.5 percent in 2023.
The bank plans to continue an Aus$4 billion ($2.9 billion) per week bond-buying programme until at least February 2022, when the stimulus measure will be reviewed.
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