RBA’s Hunter: Board will intervene as necessary to bring inflation back to target
Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter said on Wednesday that the central bank will act as needed to bring inflation back to target, even as the recent oil shock has yet to produce a marked slowdown in economic activity.
Key quotes
The recent oil shock has led to falls in consumer and business confidence but there are so far few signs of a marked slowdown in activity.
It is not always correct to look through supply shocks and that a period of low inflation and higher unemployment might be needed if inflation expectations start to drift up.
Supply shocks create difficult trade-offs but do not lessen the importance of maintaining low and stable inflation.
The board will continue to act as needed to ensure inflation returns to target and the labour market to sustainable full employment.
Market reaction
At press time, the AUD/USD pair trades 0.09% higher at around 0.6934.
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