Reserve Bank of Australia (RBA) has announced an increase in the cash rate target for November 2023 after the board meeting held on 7th November 2023
The cash rate target has increased after remaining still for the past five months. The cash rate target for November 2023 sits at 4.35 per cent – still the highest cash rate target since 10 years ago. The Reserve Bank of Australia’s Board had previously found it appropriate to hold rates steady to provide time to assess the impact of the increase in interest rates. Now, due to the slow progress in the decline in CPI inflation, the Reserve Bank of Australia’s Board has warranted the need for an increase in the cash rate target. The Board has assured that the increase in cash rate target will help speed up the progress of inflation back to the targeted range.
Overall, the Board’s main priority remains to return inflation back to the target range (2-3 per cent range). High inflation makes life difficult for people and damages the functioning of the economy. Hence, although inflation (consumer price index, CPI) in Australia has passed its peak, it is still too high. CPI inflation is now expected to be around 3½ per cent by the end of 2024 and at the top of the target range of 2 to 3 per cent by the end of 2025. While taking measures to ensure that inflation declines within the expected time frame, the Board will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market.
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Date revised: 08 November 2023