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Feb. 5, 2019, 10:31 p.m. EST

Chief of Australia’s central bank says rate changes may lie ahead

Reserve Bank of Australia has kept interest rates steady since mid-2016

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By James Glynn

Bloomberg News
Philip Lowe, governor of the Reserve Bank of Australia, speaks in Canberra, Australia, in 2018.

SYDNEY — The Governor of the Reserve Bank of Australia Philip Lowe said Wednesday the outlook for interest rates has become more balanced, warning that there is a risk the economy could be weaker than the central bank thinks.

“Looking forward, there are scenarios where the next move in the cash rate is up and other scenarios where it is down,” Lowe said in a speech to the National Press Club here.

“Over the past year, the next-move-is-up scenarios were more likely than the next-move-is-down scenarios. Today, the probabilities appear to be more evenly balanced,” he said.

The comments represent a significant shift for the central bank, which has held interest rates steady since mid-2016, and pointed to the likelihood that a tightening job market will lift wages and inflation over time. The RBA left its benchmark cash rate on hold at 1.5% on Tuesday after its first policy meeting since December.

An expanded version of this report appears on WSJ.com.

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