Australian Central Bank's Insights: Keeping Interest Rates Steady Would Have Resulted in Inflation Miss

In a recent statement from Reserve Bank of Australia (RBA) board member, Paul Hauser, the potential repercussions of maintaining current interest rates were brought to the forefront. He contended that had the bank opted to keep rates unchanged, it would have resulted in a significant undershoot of the Consumer Price Index (CPI) targets. Such a decision would have jeopardized the credibility of Australia’s monetary policy.

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