Australia’s central bank kept the key interest rate unchanged at 4.1 percent
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The Reserve Bank of Australia has raised the cash rate 12 times since May last year to keep inflation within its target of two to three per cent. High interest rates had pushed up the cost of debt for both the corporate sector and consumers.
Canberra. Australia’s central bank decided to keep the key interest rate unchanged at 4.1 per cent at its policy meeting on Tuesday. Inflation has come down to 5.6 per cent in May, compared to 6.5 per cent in April. Due to the decrease in inflation, the central bank has not changed the interest rate. The Reserve Bank of Australia has raised the cash rate 12 times since May last year to keep inflation within its target of two to three per cent. High interest rates had pushed up the cost of debt for both the corporate sector and consumers.
Due to this the economic activities were sluggish. Bank governor Philip Lowe said further interest rate hikes may be needed. He said that further tightening of the monetary stance may be needed to bring inflation within the target range in a given time frame. However, he added that it would depend on the state of the economy and inflation.
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