RBA Governor Says ‘Evil of Inflation’ Must Be Ended

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by James Glynn

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SYDNEY – The Reserve Bank of Australia has slowed the rate at which it raised interest rates, but inflation remains a crisis that must be rooted out, central bank governor Philip Lowe said on Tuesday.

In a speech following the RBA’s decision to give a 25-basis-point hike in official interest rates for the second time in a row, Mr Lowe said the damage to the economy from high inflation dominated the discussion at the board’s table.

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“I would like to take this opportunity to assure you that the Board is firm in its determination to bring inflation back to the target range of 2 to 3 per cent. We will do whatever is necessary to achieve this,” he said.

“In our meeting today we discussed what harm high inflation does to people. It is a curse. High inflation devalues ​​your savings. It increases inequality in our society and it weakens our standard of living. It hurts all of us by sabotaging our economy,” Mr. Lowe said.

From September through September, Australia’s inflation rate stood at 7.3%, the highest rate in more than three decades.

The RBA on Tuesday raised its inflation forecast to a peak of 8% or more in the fourth quarter, up from an earlier forecast of 7.75%.

If interest rates are not raised, “the evil of inflation will be with us for a long time and the eventual increase in interest rates required to bring it down will be greater. This will increase the risk of a severe recession and a sharp rise in unemployment.” Mr. Lowe said.


Write to James Glynn at [email protected]


Credit: www.marketwatch.com /

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