SYDNEY, Sept. 16 (Xinhua) -- Governor of the Reserve Bank of Australia Philip Lowe said that further increases in interest rates, though unwelcome for many people, are needed to bring inflation back to the 2-3 percent target range.

Lowe made his remark at a public hearing this Friday morning when Australia's House of Representatives Standing Committee on Economics probed the central bank's recent interest rate policy, as well as its approach to tackling inflation.

Knowing that higher rates are "unwelcome for many people, especially those who have borrowed large sums over recent times," the governor made clear in his speech that the bank board expects further rate rises, but the pace of increase may slow down at some point.

During the hearing, Lowe expounded on several global factors that drove up inflation in Australia, including the disruption of energy markets due to the Russia-Ukraine conflict, ripple effects of the COVID-19 pandemic on global supply chains, and domestic demand for goods being relatively high compared to the economy's ability to meet it.

"Over the year to June, the headline inflation rate was 6.1 percent. It is expected to increase further over the months ahead to peak at around 7.75 percent later this year," said Lowe. "Inflation is then expected to start declining, to be back around 3 percent late in 2024."

According to a statement from Daniel Mulino, chair of the Economics Committee, with Australia experiencing its highest inflation in 20 years, household budgets are feeling the pressure.

"Australians have also seen interest rates rise for the past five months, which not only affects mortgage holders and families but small businesses and investment too," Mulino said, highlighting the importance of continuing scrutiny of RBA's monetary policy in this context.

Meanwhile, this committee hearing took place alongside a separate independent review of the RBA, to which Mulino said the hearing "will thus complement, not replicate, the work of the Independent Review of the Reserve Bank." Enditem

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