Statement by Michele Bullock, Governor: Monetary Policy Decision

Summary:

The Board of [Organization/Entity] has decided to raise the cash rate target by 25 basis points to 4.35% to ensure that inflation returns to its target range of 2-3% within a reasonable timeframe. The decision was made due to increased inflationary pressures, including rising services prices and underlying inflation being higher than expected. The Board also increased the interest rate paid on Exchange Settlement balances by 25 basis points to 4.25%. The central forecast indicates that CPI inflation is expected to be around 3u00bd% by the end of 2024 and at the top of the target range by the end of 2025. The Board will continue to closely monitor developments in the global economy, domestic demand, and the labor market to determine if further tightening of monetary policy is necessary to achieve its inflation targets.

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