Christopher Kent: Exchange rates and inflationary pressures

Speech by Mr Christopher Kent, Assistant Governor (Financial Markets) of the Reserve Bank of Australia, at the Commonwealth Bank Global Markets Conference, Sydney, 24 October 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
24 October 2022


I'd like to thank CBA for the opportunity to be here today.

Inflation is too high in most economies. This reflects disruptions to supply coupled with strong demand. There has been an unprecedented monetary response in terms of the size of policy rate increases, across a wide range of central banks in a short span of time. Graph 1 shows the average of policy rates across a selection of central banks covering about 70 per cent of the global economy. If market expectations for policy rates pan out, then by the first part of next year the average policy rate will have increased by an amount comparable to the rise seen through the mid-2000s – but while that increase occurred over four years, this increase will have taken just four quarters.