- POSTED: 23 Jul 2014 11:59
- UPDATED: 23 Jul 2014 12:00
Australian inflation rose 0.5 per cent in the three months to June, new figures showed on Wednesday, giving the country's central bank room to keep interest rates at a record-low to support the economy.
SYDNEY: Australian inflation rose 0.5 per cent in the three months to June, new figures showed on Wednesday, giving the country's central bank room to keep interest rates at a record-low to support the economy.
The consumer price index (CPI) had lifted 0.6 per cent in the previous quarter, the Australian Bureau of Statistics (ABS) said.
The latest figures took the annual rate of inflation to 3.0 per cent, up from 2.9 per cent in the year to March. It remained within the Reserve Bank of Australia's target range of 2.0 to 3.0 per cent. The Australian dollar slipped briefly before surging to 94.39 US cents.
The ABS data was in line with market expectations of an increase of 0.5 per cent quarter-on-quarter and 3.0 per cent over the year. Underlying or core inflation, a gauge that strips out volatile items and is more closely watched by the Reserve Bank, rose by 0.7 per cent for a year-on-year rate of 2.8 per cent.
"We view today's outcome, and the inflation outlook more broadly, as neutral for monetary policy," ANZ's senior economist Riki Polygenis said. "It does not appear weak enough to justify a rate cut. Equally, it implies little urgency for the RBA to wind back very expansionary monetary policy."
Australia's central bank has left the cash rate on hold at 2.5 per cent since cutting it by 25 basis points in August as the economy transits away from an unprecedented boom in the mining sector.
The Reserve Bank has sought to boost growth in non-resources industries to help fill the gap expected to be left by a fall off in mining investment later this year.
RBA governor Glenn Stevens said in a speech Tuesday he was "content right now" with Australia's monetary policy settings.
The central bank has since February flagged a "period of stability" in interest rates.