Fed: RBA inflation data points to steady interest rates

AAP General News (Australia)
04-24-2007
Fed: RBA inflation data points to steady interest rates

CANBERRA, April 24 AAP - Interest rates look set to remain on hold in the months ahead
after two key measures of inflation proved unexpectedly benign.

Both the Australian Bureau of Statistics (ABS) and the Reserve Bank of Australia (RBA)
found only slight rises in the consumer price index (CPI) in the first three months of
this year.

The RBA's weighted median CPI and trimmed mean CPI both rose 0.5 per cent in the first
quarter, for an annual rate of 2.7 per cent.

Market economists had expected the weighted median to rise by 0.7 per cent and the
trimmed mean to rise by 0.6 per cent.

The measures - calculated from the CPI released earlier by the ABS - smooth out volatile
price swings from items such as food and energy, and indicate whether price pressures
are becoming embedded in the broader economy.

The CPI rose just 0.1 per cent in the first quarter for an annual rate of 2.4 per cent,
the ABS said.

All measures of the annual rate of inflation are now back within the central bank's
2-3 per cent inflation target.

The CPI soared to 4.0 per cent in the middle of last year, which prompted the central
bank to raise interest rates three times in 2006 to a six-year high to curb inflation
pressures.

AAP cb/mfh/ks/bwl

KEYWORD: INFLATION RBA

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