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Australian Times


More Pain to Come: ANZ Adjusts RBA’s Terminal Cash Rate

June 2, 2023 by Ben Collins in Business, Uncategorized with 0 Comments

In response to the nation’s rising inflation rates, ANZ has adjusted its previous forecast and now deems a terminal cash rate of 4.1 percent insufficient to address the issue. The bank now anticipates that the Reserve Bank of Australia (RBA) will need to raise the terminal cash rate to 4.35 percent, with a potential move as early as August. The inflation rate for this month shows an annual increase of 6.8 percent, surpassing the 6.3 percent rise reported in March 2023. Michelle Marquardt, head of price statistics at the Australian Bureau of Statistics, attributed the higher inflation in April to soaring fuel prices. RBA Governor Philip Lowe, during a recent Senate estimate hearing, refrained from declaring victory over inflation and warned of further challenges in the cost of living for Australians. ANZ’s revised forecast aligns with the RBA’s goal of returning the inflation rate to the range of 2 to 3 percent. Meanwhile, Westpac, one of Australia’s largest financial institutions, has made adjustments to its fixed interest rates for home loans, decreasing the two-year fixed rate for owner-occupiers while increasing rates for one-year fixed owner-occupier and investment property loans.

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