SYDNEY (Aug 19) — The Reserve Bank of Australia (RBA) may need to raise interest rates again if upside risks to inflation crystallize, Deputy Governor Andrew Hauser said on Wednesday.
Speaking in Queensland, Hauser emphasized that inflation in Australia remains "too high," despite the central bank holding its benchmark rate steady at 4.35% for a second consecutive meeting last week. The RBA has raised rates by a cumulative 75 basis points since February to curb persistent inflationary pressures.
Hauser identified three key risks that could reignite inflationary pressures: ongoing geopolitical tensions in the Middle East, the global surge in artificial intelligence investment, and weak productivity growth. The Deputy Governor did not provide a timeline for potential further tightening but stressed that the RBA’s policy stance would remain data-dependent.
Australia’s central bank has maintained a cautious approach in recent months, balancing the need to tame inflation with concerns over economic growth. The RBA’s next policy decision is scheduled for early September, with markets closely monitoring incoming data for signs of sustained inflationary pressures.
