(Australian context) How do interest rates affect inflation in this day and age?

I really don%26#039;t get this. At the moment, most inflation is directly or indirectly related to the price of fuel. Many people do not have mortgages and have enough money to support themselves without using credit.

How can the reserve bank continue to assume that interest rates will control inflation when, rate rise after rate rise, price inflation seems to continue?

(Australian context) How do interest rates affect inflation in this day and age?

It is precisely because oil (an import) is so important to overall inflation that the interest rate helps control it. When a national reserve bank raises its interest rate, the currency becomes more expensive, and this helps keep imports, like oil, cheaper.

The price of oil is denominated in US dollars, and the US is keeping its interest low, so these policies complement one another. A drop in interest rates in Australia or a rise in interest rates in the US would make Australia%26#039;s imported oil, and therefore everything else, more expensive.

A high interest rate hurts people who do have mortgages or need other credit, so that could be another reason why a high interest rate isn%26#039;t such a bad policy in Australia%26#039;s case. Everything would be different if Australia was exporting lots of goods and producing most of its own oil. Then you would want to lower interest rates to keep boosting production and keep your exchange rate low for foreign buyers.

(Australian context) How do interest rates affect inflation in this day and age?

i try not to focus on notteeng except forr soda and a fighting