Australia's central bank sees no interest rise before 2023

Australia's central bank will not raise interest rates from record lows in 2022, but an increase the following year is now "plausible," the bank's governor said yesterday.

The Reserve Bank kept borrowing costs on hold at 0.1 percent at a regular policy meeting but dropped a bond yield target, signalling rates could now rise earlier than the previously expected 2024. It comes as other central banks across the globe have tightened policy to cool soaring prices and still more are considering doing so.

RBA governor Philip Lowe said a rate hike was now "plausible" in 2023, after inflation picked up but remained low at 2.1 percent. The bank now expects inflation to grow gradually before reaching 2.5 percent in 2023, still within its target of 2-3 percent.

"The latest data and forecasts do not warrant an increase in the cash rate in 2022," Lowe said. "I recognize that some other central banks are raising rates, but our situation is different."

Central banks in Brazil, Singapore, South Korea and New Zealand have all increased borrowing costs recently. And the Bank of England is expected to do so tomorrow.