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Australia inflation gauge eases back in Feb
[SYDNEY] A private-sector gauge of Australian inflation eased in February as fuel prices fell, while measures of core prices also showed no signs of upward pressure.
The benign underlying trend should reassure the Reserve Bank of Australia (RBA) that it can keep policy loose when it holds its monthly board meeting on Tuesday.
The central bank is widely expected to hold the cash rate at a record low 2 per cent and signal there is scope to ease further should that be necessary.
Monday's survey from the Melbourne Institute showed consumer prices fell 0.2 per cent in February, partially reversing a rise of 0.4 per cent in January.
The annual pace slowed to 2.1 per cent from 2.3 per cent, and remained stuck in the lower half of the RBA's target band of 2 to 3 per cent. A measure of underlying inflation pressure, the trimmed mean, also slowed to 1.7 per cent from 2.0 per cent.
"This month's fall in inflation reverses some of last month's beginning of year spike. February's fall reflects pass-through effects stemming from oil price volatility," said Sam Tsiaplias, Senior Research Fellow at the Melbourne Institute.
Costs for tradable goods and services fell 0.5 per cent in February, unwinding most of January's 0.6 per cent rise. Non-tradable prices, those not determined by international competition, eased 0.1 per cent, also reversing January's 0.2 per cent increase.
Inflation excluding fuel, fruit and vegetables drifted down 0.1 per cent in February, slowing the annual pace to 2.1 per cent.