Oct. 3 (Bloomberg) -- Australia’s annual inflation rate slowed in September on declining costs of fruit and vegetables, motor vehicles and dairy products, a private report showed.
Consumer prices rose 2.8 percent last month from a year earlier following a 2.9 percent annual gain in August, according to an index compiled by TD Securities Inc. and the Melbourne Institute released in Sydney today. The central bank aims to keep annual inflation in a 2 percent to 3 percent range on average. Prices increased 0.1 percent in September from a month earlier after a 0.1 percent decline in August.
Reserve Bank of Australia Governor Glenn Stevens tomorrow will keep the benchmark interest rate at 4.75 percent for a 10th straight meeting, according to all 21 economists in a Bloomberg News survey. JPMorgan Chase & Co. last week changed its forecast for RBA rates, saying Stevens likely will hold borrowing costs through 2012 from an earlier call for two increases next year.
“For the RBA board meeting tomorrow, a pause in inflation pressure and ongoing ructions in financial markets provide ample ammunition to sit tight,” Annette Beacher, head of Asia-Pacific research at TD Securities in Singapore, said in a statement. The RBA may be keep rates unchanged “for quite some time,” she said.
Today’s inflation report showed the price of fruit and vegetables fell by 5.6 percent in September, following a fall of 1.6 percent in August. The price of automotive fuel gained 3.2 percent, it showed.
Stevens hasn’t moved the nation’s key rate since he last raised it in November to the highest level in the developed world. In a Sept. 7 speech, a day after the most recent RBA policy decision, he signaled a willingness to pause while the nation’s consumers retrench and global financial markets create instability for the “foreseeable future.”
“Periods of sudden increases in anxiety within international financial markets are moments when, if at all possible, it is good to be in a position to be able to maintain steady settings,” Stevens told a conference in Perth.
The Melbourne Institute is a research unit of Melbourne University, and TD Securities is a division of Toronto-Dominion Bank, Canada’s second-largest lender. The monthly inflation index measures the prices of more than 1,000 goods and services.
--Editors: Brendan Murray, Benjamin Purvis
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