Inflation .Consumer Price index. Australia .Reserve Bank of Australia. March Interest rate

Key Points:Inflation .Consumer Price index. Australia .Reserve Bank of Australia. March Interest rate

INFLATION

 Inflation refers to the general increase in the prices of goods and services in an economy over a period of time, usually measured by the Consumer Price Index (CPI).

Consumer Price Index (CPI)

The Consumer Price Index (CPI) is a measure of the average price level of goods and services consumed by households. It is calculated by taking the weighted average of prices of a basket of goods and services. In Australia, the CPI is published by the Australian Bureau of Statistics (ABS) and is used by the Reserve Bank of Australia (RBA) as a key indicator of inflation.

Reserve Bank of Australia

The Reserve Bank of Australia is Australia's central bank, responsible for monetary policy, issuing currency, and regulating the financial system. The RBA's primary objective is to maintain price stability, which it does by setting the official cash rate, the interest rate at which commercial banks borrow and lend money to each other overnight.

March 2023

In March 2023, the RBA's Board decided to maintain the cash rate target at 0.75%. The decision was made in light of the current economic conditions in Australia, including the ongoing impact of the COVID-19 pandemic on the economy, as well as low inflation and slow wage growth.

Overall, the RBA closely monitors inflation, and uses the CPI as a key indicator to help guide its monetary policy decisions. Inflation is an important factor in the RBA's decision-making process, as it aims to maintain price stability while also supporting economic growth and employment.