Reserve Bank of Australia expects to stick to rate hikes of 25-50 bps

AUSTRALIA’S top central banker said on Tuesday he expected to discuss raising interest rates by either 25 or 50 basis points (bps) at its July policy meeting, playing down the chance of an even bigger increase.

Answering questions after a speech, Reserve Bank of Australia (RBA) Governor Philip Lowe also said market pricing for the current 0.85 per cent cash rate to reach as high as 4.0 per cent by the end of the year would be the most aggressive tightening on record and was “not particularly likely”.

There has been some market speculation the RBA could raise rates by 75 bps in July or August, given surging inflation and a recent outsized hike by the US Federal Reserve. REUTERS