Cooling inflation in Australia prompts RBA to deliver further easing: Bloomberg

The consumer price index in Australia unexpectedly dropped from 2.8% to 2.4% in February, adding to arguments that the Reserve Bank (RBA) will proceed with interest rate cuts in the coming months, Bloomberg reports.

The inflation gauge remains within the RBA’s target range of 2–3%. The slowdown in consumer price growth was driven by lower rental costs, as well as cheaper fuel, according to the ABS Group. 

The RBA considers this data when making a decision on monetary policy. Last month, the central bank cut the interest rate to 4.1%. The regulator's officials are confident that inflation is easing. However, they remain wary of upside risks.

Among the potential causes for concern are tax cuts and other sweeteners in the Australian government's pre-election budget. However, according to Finance Minister Katy Gallagher, these steps will be implemented gradually and will not have a significant impact on consumer price growth in the country.