Australian central bank governor says too early to predict economic impacts of Middle East situation

Alsharq Tribune-Otaify 

The head of Australia's central bank said on Tuesday that it is too early to predict the impacts of the Middle East situation on the country's economy.

Michele Bullock, governor of the Reserve Bank of Australia (RBA), said at a business summit in Sydney on Tuesday morning that the central bank's interest rate-setting Monetary Policy Board is very alert to the potential implications of the tense situation in the Middle East on domestic inflation.

However, she said that it is too early to say what the impact will be for Australia, suggesting that the conflict could cause a supply shock that adds to inflation pressures or result in downward pressure on inflation through a prolonged impact on energy markets that has adverse effects on global activity.

"It's too early to say what the economic impact will be, events are moving rapidly and there are different ways this can play out. We will take some time to make sense of what it could mean for inflation here," she said.

The Monetary Policy Board will next meet in mid-March to decide whether to raise its key interest rate, the cash rate target, for the second time in 2026 after Australia's annual rate of inflation came in higher than expected at 3.8 percent in January.

The board in February unanimously voted to increase the cash rate target from 3.60 percent to 3.85 percent in response to a spike in inflation, marking the first rate hike in over two years.