FX.co ★ RBA Keeps Door Open for Immediate Policy Tightening

Reserve Bank of Australia Governor Michele Bullock said on Tuesday that an interest rate increase remains a possibility as early as this month if inflation expectations become unanchored. Speaking at a business conference, she emphasized that the board would not necessarily wait for the full first-quarter inflation figures, which are due in late April, before making a decision.

“Every meeting is live,” Bullock said, referring specifically to the March 17 board meeting, and noted that policymakers would consider whether they need to act more quickly.

Financial markets have largely been assuming that the central bank would wait for the first-quarter CPI report on April 29 and, if necessary, move at the May 5 meeting. Bullock, however, said she wanted to “dissuade” markets from relying on that assumption, signaling that the board remains flexible and prepared to tighten policy sooner if required.