Despite some commentators’ predictions, the Reserve Bank of Australia this week opted to make no change to interest rates at their first meeting for 2022, leaving the official cash rate at .10%.
The official rate has not changed since November 2020.
In a statement announcing the decision, RBA governor Philip Lowe said that while the Omicron outbreak has affected the economy, it has not derailed economic recovery.
“The Australian economy remains resilient and spending is expected to pick up as case numbers trend lower”, Lowe said, adding that while inflation has picked up, it is too early to conclude that it is in the target range.
Wages growth remains one of the Bank’s markers, and is considered likely to take some time before it is ‘at a rate consistent with inflation being sustainably at target’.
In a variation from its previous ‘not before 2024’ stance, the Board is now saying that it is ‘prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve’, before making any moves to raise interest rates.
