RBA Governor Michele Bullock admitted the central bank was too slow to raise interest rates in response to rising inflation.
Speaking before a Senate committee, she emphasized that the RBA now aims to act proactively rather than react too late.
She acknowledged that the bank’s delayed response contributed to inflationary pressures.
The RBA’s recent 25-basis-point rate cut was its first since November 2020.
Bullock stressed the importance of lowering rates strategically as inflation trends downward.
Under former Governor Philip Lowe, the RBA did not raise rates from their emergency low until May 2022, when inflation had already surged.
Despite financial markets predicting two more cuts this year, Deputy Governor Andrew Hauser signaled this is unlikely.
Hauser warned that following market expectations for rate cuts could prevent inflation from returning to target levels.
The RBA’s forecasts consider market predictions but do not necessarily align with them.
Officials remain cautious, prioritizing inflation control over rapid rate reductions.
