Australia’s central bank chief determined to stamp down on inflation

SYDNEY, March 14, 2008 (AFP) – Australia’s central bank governor has predicted inflation is poised to rise to four percent, fuelling expectations interest rates will be hiked again.

Reserve Bank governor Glenn Stevens, who has lifted rates twice this year in a bid to curb prices, said the latest inflation figures due next month were unlikely to fall within the bank’s official annual two to three percent target.

“When we get the March 2008 figures towards the end of April, we will most likely find that the rise over the four quarters is more like four percent,” Stevens said in an address to a Treasury seminar Tuesday, the text of which was released Friday.

The Reserve Bank this month lifted rates to a 12-year high of 7.25 percent and economists said Stevens’ comments showed it remained hawkish.

With the headline inflation rate running at 3.4 percent for calendar 2007, Stevens said reaching the two to three percent goal was realistic and rejected calls for the bank to lift its target.

“I do not think that the two to three percent average inflation target is too ambitious,” he said.

“We have achieved it for the past 15 years and we achieved average outcome