The latest reading of Australian inflation data will once again shake the dovish stance of the Australian Central Bank (RBA) to act to change its monetary policy.
According to the latest report from the Australian Bureau of Statistics (ABS), the consumer price index (CPI) rose 1.3% in the fourth quarter and 3.5% on an annual basis exceeding expectations for a 3.2% increase.
The annual rate rose to 2.6%, much better than expectations of 2.3% and in the middle of the RBA’s target of 2% to 3%.
Among the main contributors to the surge were due to rising fuel prices, global supply chain issues, material shortages and increased demand ahead of the Christmas holidays.
This recorded figure will certainly surprise central banks which have previously said that core inflation is unlikely to reach 2.5% until the end of 2023, which is the main reason for them not to raise interest rates this year.
With this latest reading, it could shake the RBA’s stance ahead of next week’s policy meeting (February 1).
Earlier, the RBA said the February edition policy meeting would be decisive on whether they would reduce or end the bond -buying program.
The initial reaction from this inflation data has given impetus for Aussie dollar trading to rebound after recording a fall earlier in the week.
