Central Banks
Australia Delivers ‘Dovish Hike’ as Lowe Signals Pause Ahead
- Governor adds a time element to his monetary policy guidance
- Australian dollar, government bond yields drop after decision
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Australia’s central bank signaled a pause in its 10-month tightening cycle is in prospect, prompting a selloff in the currency after policymakers delivered an expected interest-rate increase on Tuesday.
The Reserve Bank lifted its cash rate by a quarter-percentage point to 3.6%, the highest level since May 2012. Governor Philip Lowe said in his statement that in assessing “when and how much further” rates need to go up, the RBA will pay close attention to incoming economic data.