The Reserve Bank of Australia has indicated it will be assessing inflation and wage figures in coming months before raising interest rates.
The RBA board left the cash rate at a record low 0.1 per cent at Tuesday’s monthly board meeting.
RBA governor Philip Lowe said inflation has picked up and a further increase is expected, but growth in labour costs has been below rates that are likely to be consistent with inflation being sustainably at the two to three per cent target.
“Over coming months, important additional evidence will be available to the board on both inflation and the evolution of labour costs,” Dr Lowe said in post-meeting statement.
“The board will assess this and other incoming information as it sets policy to support full employment in Australia and inflation outcomes consistent with the target.”
Dr Lowe has previously stated the board will be “patient” in lifting the cash rate, but he has also said an increase this year was plausible.
Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)