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Reserve Bank Assistant Governor Karen Silk says the Official Cash Rate is working despite sticky core inflation and record high employment
Karen Silk, Reserve Bank Assistant Governor, says there is good evidence the Official Cash Rate (OCR) has begun to cool domestic inflation despite slow progress. Headline inflation has been falling for the past year, but non-tradable inflation only peaked at 6.8% in March and has fallen just 0.2 percentage points since. One of the Reserve Bank’s primary measures of core inflation has been stuck at 5.8% for the past three quarters, although others have declined. Silk said headline inflation was always going to fall faster than core inflation. Plus, the full effect of higher interest rates hadn’t been felt in the ... (full story)