20-05-2025
Australia's Soft Landing Spurs Debate Over Policy in Next Crisis
Through the post-Covid cost-of-living crisis, Australia's central bank took a gentler approach than global peers to reining in inflation, managing to keep the economy close to full employment throughout — a rare feat that's sparked debate about its viability as a model to tackle future crises.
With inflation now back in its target zone, the Reserve Bank of Australia on Tuesday reduced its key rate by a quarter percentage point for a second time in the current easing cycle to 3.85%. Across the Tasman Sea, by contrast, the Reserve Bank of New Zealand has slashed its benchmark rate by 2 percentage points to 3.5% after taking a more conventional approach with more aggressive hikes to quell price gains.
