SYDNEY — The Reserve Bank of Australia expects more interest rate increases ahead, but there will likely be a case for slowing the pace at which it raises the rates.
“In terms of the outlook for interest rates, the Reserve Bank board expects that further increases will be required to bring inflation back to target,” RBA Gov. Philip Lowe said in his opening statement to the House of Representatives Standing Committee on Economics on Friday.
Australia was not on a “pre-set path” when it comes to interest rates, particularly as monetary policy operates with a lag, Lowe said.
“At some point, it will be appropriate to slow the rate of increase in interest rates and the case for doing that becomes stronger as the level of interest rates increases,” he said.
Lowe reiterated that the size and timing of future interest rate increases would be guided by data and an assessment of the outlook for inflation and the labor market.