Canberra: Australian inflation surprisingly remained steady in January, supporting the case for the Reserve Bank of Australia (RBA) to begin cutting interest rates later this year.

       The consumer price indicator advanced 3.4% from a year earlier, below economists’ estimates of 3.6% and unchanged from December, Australian Bureau of Statistics data showed yesterday.

       When excluding volatile items, the annual rise was 4.1%, down from December’s 4.2% and still well above the RBA’s 2%-3% target band.

       The result will feed into the RBA’s deliberations at its March 18-19 meeting, with borrowing costs currently at a 12-year high of 4.35%.

       Earlier this month, the rate-setting board considered hiking further as it found that aggregate demand remained above the economy’s supply potential, raising the risk of inflation not returning to target within a reasonable timeframe. — Bloomberg