RBA Lifts Rates 0.5% For The Second Month In A Row
Taming rising inflation is set to put further strain on household budgets.
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At its meeting today, the Reserve Bank of Australia decided to increase the cash rate target by 50 basis points to 1.35%.
Monetary policy globally is responding to this higher inflation with it predicted to be some time yet before it returns to target in most countries. Further, inflation is high in Australia too, with a tight labour market and capacity constraints in some sectors contributing to upward pressure on prices.
Inflation locally is forecast to peak later this year and then decline back towards the 2-3% range next year. Higher interest rates will also help establish a more sustainable balance between the demand for and the supply of goods and services.
According to Dr Philip Lowe, Governor of Monetary Policy at the RBA, the behaviour of household spending is of concern stating:
“The recent spending data have been positive, although household budgets are under pressure from higher prices and higher interest rates. Housing prices have also declined in some markets over recent months after the large increases of recent years.”
As for what’s ahead for the Australian economy and homeowners.
“The size and timing of future interest rate increases will be guided by the incoming data and the Board’s assessment of the outlook for inflation and the labour market,” said Lowe in the statement.
“The Board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time.”
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“Only with competition can we become stronger and allow the industry to remain healthy,” Ma said
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Alibaba Group co-founder Jack Ma said competition will make the company stronger and the e-commerce giant needs to trust in the power of market forces and innovation, according to an internal memo to commemorate the company’s 25th anniversary.
“Many of Alibaba’s business face challenges and the possibility of being surpassed, but that’s to be expected as no single company can stay at the top forever in any industry,” Ma said in a letter sent to employees late Tuesday, seen by The Wall Street Journal.
Once a darling of Wall Street and the dominant player in China’s e-commerce industry, the tech giant’s growth has slowed amid a weakening Chinese economy and subdued consumer sentiment. Intensifying competition from homegrown upstarts such as PDD Holdings ’ Pinduoduo e-commerce platform and ByteDance’s short-video app Douyin has also pressured Alibaba’s growth momentum.
“Only with competition can we become stronger and allow the industry to remain healthy,” Ma said.
The letter came after Alibaba recently completed a three-year regulatory process in China.
Chinese regulators said in late August that they have completed their monitoring and evaluation of Alibaba after the company was penalized over monopolistic practices in 2021. Over the past three years, the company has been required to submit self-evaluation compliance reports to market regulators.
Ma reiterated Alibaba’s ambition of being a company that can last 102 years. He urged Alibaba’s employees to not flounder in the midst of challenges and competition.
“The reason we’re Alibaba is because we have idealistic beliefs, we trust the future, believe in the market. We believe that only a company that can create real value for society can keep operating for 102 years,” he said.
Ma himself has kept a low profile since late 2020 when financial affiliate Ant Group called off initial public offerings in Hong Kong and Shanghai that had been on track to raise more than $34 billion.
In a separate internal letter in April, he praised Alibaba’s leadership and its restructuring efforts after the company split the group into six independently run companies.
Alibaba recently completed the conversion of its Hong Kong secondary listing into a primary listing, and on Tuesday was added to a scheme allowing investors in mainland China to trade Hong Kong-listed shares.
Alibaba shares fell 1.2% to 80.60 Hong Kong dollars, or equivalent of US$10.34, by midday Wednesday, after rising 4.2% on Tuesday following the Stock Connect inclusion. The company’s shares are up 6.9% so far this year.
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