Within the bank, Lowe also faced questions about the culture he’d fostered since taking over in 2016.Įarlier this year, the RBA faced a government review into its practices and performance, which found that it was impaired by “a hierarchical culture, which can slow down decision making and limit sensible delegation.” While the June rate is far above the official target of 2% to 3%, “I think they have had success in bringing inflation down, and demand in the economy is cooling as well,” Oliver told CNN.įor comparison, inflation in the United States and Europe was 3.7% and 5.3%, respectively, in August. Like other advanced economies, Australia saw a big jump in inflation in recent years, and rate hikes were deemed necessary to help curb inflation, he added.Īustralian inflation has declined from 7.8% for the quarter ended December to 6% for the quarter ended June. “Raising interest rates is never popular, but I think given the circumstances, the Reserve Bank had to do something,” noted Oliver. Lowe responded that he intended to complete his term and noted that the bank’s decisions were collectively “made by a board of nine people.”
“Can you explain to the renters and mortgage holders of Australia why you still deserve to hold your job?” McKim asked. Many consumers reported difficulties in being able to keep up with costs and were forced to cut back on spending, RBA officials acknowledged in a February speech.įor months, higher costs of living have dominated headlines in Australia, with local media pointing to a record number of people working multiple jobs.Īt a parliamentary hearing in February, Senator Nick McKim told Lowe that he had “induced people into taking on record levels of debt by saying that interest rates were unlikely to increase until 2024.” The hikes created headaches for households. That startled some observers and sparked public anger, particularly for many Australians who took out loans or mortgages believing borrowing costs would remain low. However - following Russia’s invasion of Ukraine in February 2022, which pushed up inflation around the world - the central bank went on to raise rates 12 times from May 2022 to the present, a record run. In 2021, the former central bank chief said the cash rate - the main interest rate that influences all others in the country - may not rise until 2024, based on economic conditions at the time and RBA forecasts.
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