RBA’s Hauser: Response depends on size and persistence of the price shock, that is very uncertain
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said on Tuesday that volatility in oil prices and the Middle East is a genuine challenge for central banks. Hauser further stated that the response depends on the size and persistence of the price shock, which is very uncertain.
Key quotes
Our response depends on size and persistence of the price shock, that is very uncertain.
Oil price rise clearly an upside risk to our inflation projection but still in flux.
Volatility in oil price and Middle East a genuine challenge for us.
Australian economy in many ways is in good shape.
Recent data appear to have confirmed even more decisively that economy has limited spare capacity.
A 5% peak for inflation probably looks somewhat pessimistic.
There will be very genuine policy debate at board meeting with arguments on both sides.
But uncertainty regarding developments in Iran is extremely high.
Not all the domestic data came in as strongly as expected including consumption.
Market reaction
At the time of writing, AUD/USD is holding higher ground near 0.7078, adding 0.03% on the day.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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