Despite ten consecutive interest rate rises, Australia still sets well below other countries which have taken a bigger stick to getting inflation down.
The RBA held rates steady after its April meeting, in an effort to assess what impact the previous rises have had on inflation.
Australia’s cash rate of 3.6% is below other global central banks, including the United States, 5%, Canada, 4%, the UK, 4.25% and even close neighbours, New Zealand, 5.25%.
Fortunately for Australia’s economy in terms of affecting inflation, wages growth has not been out of control.
RBA Governor, Phillip Lowe, says because the majority of Australian homeowners are on variable rate mortgages, they quickly adjusted to the rate rises which decreased consumer spending and potentially helped decrease inflation faster than in other countries where borrowers are typically on long-term fixed-rate loans.
HSBC economist Paul Bloxham says it appears the RBA is putting a higher priority on delivering a soft economic landing than other central banks.