In a speech, RBA Governor Philip Lowe said ending the bond purchase program “does not mean that an increase in the cash rate is imminent”.
He noted that while inflation has picked up in Australia, it remains “substantially lower” than the 7% in the US, 5.4% in the UK and 5.9% in New Zealand. It has “not been accompanied by strong wages growth” as in the case in the US and UK. “Our lower rate of inflation and low wages growth are key reasons we don’t need to move in lock step with others,” he added.
Lowe also said it’s “too early to conclude” that inflation is sustainably the in the target range. And there is “a range of significant uncertainties” here that will “take time to resolve”. He reiterated that “the Board is prepared to be patient as it monitors the evolution of the various factors affecting inflation in Australia.”
