Reserve Bank Urged to Adapt After US Fed’s Aggressive Interest Rate Reduction

An expert says RBA’s slow pace has left inflation high, while the Fed’s strategy succeeded. He suggested the RBA to reconsider its gradual approach.

Two women walk next to the Reserve Bank of Australia headquarters in central Sydney, Australia, on Feb. 6, 2018. Daniel Munoz/Reuters

The U.S. Federal Reserve announced on Sept. 18 that it would cut interest rates by half a percentage point. This move has been a big relief for financial and commodity markets but has added more pressure on the Reserve Bank of Australia (RBA) to bring forward its own plans for rate relief.

As many as ten key central banks have been trimming their key interest rates since last year, including those in the United States, the UK, Canada, the European Union, and New Zealand.