(24 August 2011 – Australia) Reserve Bank of Australia deputy governor Ric Battellino said ‘extreme’ financial market volatility meant the RBA was wary of raising interest rates.Mr Battellino said even though inflation in Australia had started to rise, the RBA remained wary of raising interest rates while markets experienced the most volatility since the global financial crisis.
He admitted that the next move in rates would depend on how the current market fractures played out. The central bank has held rates at 4.75 percent since November.
‘Inflation forecasts for the longer term have risen to be a little above the top end of the target range,’ he said.
‘This was the situation as it stood at the time of the last board meeting.
‘As you know since then market volatility has become more extreme.
‘An important issue ahead of us will be to assess what impact this is likely to have on global and domestic economic activity. As yet there is little information on which to base such judgements.’