Reserve Bank governor Philip Lowe has been urged to ignore the election campaign and cement the RBA’s independence from politics by raising interest rates on Tuesday to tame inflation.
Reserve Bank of Australia governor Philip Lowe has been urged to ignore the election campaign and cement the RBA’s independence from politics by raising interest rates on Tuesday to tame inflation.. New producer price figures on Friday showed business inflation costs hit a 13-year high in the March quarter.
“To have any semblance of credibility, let alone independence, the RBA board must take the same action when it meets on Tuesday,” he said.“To not do so risks, rightly or wrongly, a fomenting of damaging perceptions regarding RBA independence.” Underlying inflation – which strips out large price movements such as for petrol – was 3.7 per cent in the March quarter this year, compared with 2.9 per cent in the September quarter 2007, he said.
On Sunday at his campaign launch, Mr Frydenberg told journalists “you should know better than asking the treasurer to speculate on a decision of the Reserve Bank that may or may not be taken at the next meeting.”“I’ve said publicly that just as fiscal policy is starting to normalise, as we’ve brought to an end those emergency payments, so too monetary policy will normalise over time.
Dr Lowe noted in his April board meeting statement that, “over coming months, important additional evidence will be available to the board on both inflation and the evolution of labour costs.
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