Australia May Resume Raising Interest Rates in November, Goldman Says

Australia’s central bank may resume raising borrowing costs in November and could start as early as October, Goldman Sachs Group Inc. said.

Evidence that the nation’s economy is strengthening will prompt the Reserve Bank of Australia to increase the benchmark lending rate by 100 basis points, or one percentage point, to 5.5 percent in the next 12 months, Goldman economists including Tim Toohey in Melbourne said in a note to investors today.

“The next hike is most likely to come in November, but an earlier move in October cannot be ruled out,” Toohey said. “Indeed, the RBA could start to signal a more hawkish bias as soon as” the bank’s next meeting on Sept. 7, he said.

Central bank Governor Glenn Stevens led Group of 20 policy makers by increasing the benchmark rate six times to 4.5 percent in May from a half-century low of 3 percent in October.

To contact the reporters for this story: Jacob Greber in Sydney at jgreber@bloomberg.net; Daniel Petrie in Sydney at dpetrie5@bloomberg.net

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