FX.co ★ RBA Sees Upside Risks to Inflation Outlook: December Minutes

The Reserve Bank of Australia's board observed an escalation in inflation risks following unexpectedly high consumer price indices reported in October and the third quarter, as revealed in the minutes from their December meeting. Nonetheless, some of the inflation increase might be attributed to volatile factors, making it imperative to review the fourth quarter figures scheduled for release in late January. Australia's central bank deliberated on whether a rise in interest rates could be necessary in 2026, considering the recent inflation upsurge. However, they concluded that more time is required to ascertain the situation definitively. As reflected in the minutes, the board discussed when a potential increase in the cash rate might warrant consideration within the upcoming year. While recent data indicated that inflation risks had skewed upward, the board determined that further time was needed to evaluate the persistence of inflationary pressures.