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Australian inflation rose only modestly in August, while underlying price pressures eased further. It's a sign that interest rates are unlikely to increase in the near term.
The Reserve Bank of Australia is expected to hold rates at 4.5 percent for a fourth consecutive month, when it meets tomorrow. The annual pace of inflation stood at 3 percent in August, up from 2.8 percent in July. That put it at the ceiling of the central bank's long term target band of 2 to 3 percent. But the momentum of inflation is clearly slowing.
Economists say that with breathing room on inflation for now, and the global outlook more uncertain, Australia is expected to leave rates on hold for the rest of the year.