RBA says nearer to point when it can wait on rates

SYDNEY: A top official of the Reserve Bank of Australia (RBA) says it might be getting nearer to the point when it might be able to “sit and wait” on raising interest rates, but more evidence was needed that demand was slowing as desired.

Answering questions before parliament, RBA deputy governor Michele Bullock said interest rates had already risen substantially in a short period of time and were expected to rise further, but that would depend on the flow of economic data.

Rates were at “a level now that is getting up to where, maybe, there might be an opportunity to sit and wait and look a little bit at what’s going to happen next,” Bullock told a Senate economics committee.

“We think interest rates will probably have to go up a little bit further, but we’re not set on our timing and we’re not set on the amount,” she added.

The RBA has raised its cash rate by 275 basis points since May, taking it to a nine-year high of 2.85%.

Markets are wagering on another hike of 25 basis points in December, with around a 20% chance the RBA might hold steady.