The central bank is facing increasing pressure to raise its key interest rates, but it will not do so until December at the earliest, the Australia and New Zealand Banking Group (ANZ) said.
The nation’s consumer price index (CPI) rose 2.07 percent annually last month to an 18-month high, registering an annual growth of more than 2 percent for the first time since February last year, mainly due to more expensive food products, which rose 5.6 percent.
The prices of eggs rose 19.39 percent, meat was up 11.85 percent, vegetables rose 11.16 percent, fruits were 6.30 percent higher and fish increased by 5.66 percent, central bank figures released on Friday showed.
“The risk of a policy rate hike has heightened. However, the local market shows no sign that the central bank is ready to lift the base rate in September’s meeting,” ANZ said in a research note.
With the nation scheduled to hold the nine-in-one elections on Nov. 29, the central bank’s monetary policy will tend to be prudent until after the elections, ANZ said.
“We do need to monitor the development of the inflation rate in the last quarter and the risk of an earlier-than-expected rate hike in December,” it said.
The central bank, which left its benchmark discount rate unchanged for the 12th consecutive quarter at 1.875 percent during its last board meeting on June 26, will hold its next quarterly board meeting on Sept. 25.
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