Reserve bank keeps interest rates on hold and ends stimulus as Australian economy recovers

Philip Lowe says the RBA will be patient as it monitors how the various factors affecting inflation in Australia evolve before any interest rate rise. Photograph: Rick Rycroft/AP

Mortgage-holders and other borrowers may face higher repayment costs sooner than expected after the Reserve Bank of Australia declared it would stop buying government debt from 10 February and lifted its forecast for underlying inflation next year while cutting its jobless rate projection.

The steps, disclosed after the RBA’s first meeting of 2022 on Tuesday, suggest the central bank deems it can pare support for an Australian economy already bolstered by record budget deficits even with disruptions from the Omicron Covid variant.