Australia's monthly inflation indicator showed price pressures continued to cool in February, keeping the door open for the Reserve Bank of Australia to cut interest rates further, perhaps as early as next month.

The inflation indicator rose 2.4% in the 12 months to February, slightly below market expectations and well entrenched within the RBA's target band, the Australian Bureau of Statistics said Wednesday.

The data for February comes after the indicator held steady at 2.5% for the previous two months.

The hot spots for price gains over the last year were in food and non-alcoholic beverages, alcohol and tobacco, and housing.

Annual trimmed mean inflation was 2.7% in February 2025, down slightly from 2.8% in January, the data showed.

The data comes as Treasurer Jim Chalmers declared victory over inflation in Tuesday's federal budget for 2025-26, and as the RBA has signaled future moves to lower interest rates will be data dependent.

The board of the central bank meets Monday for a two-day policy meeting, after tentatively lowering the official cash rate for the first time since 2020 in February.

Annual housing inflation was 1.8%, down from 2.1% in January, the data showed.

Rents rose 5.5% in the 12 months to February, following a 5.8% rise in the 12 months to January, the lowest annual growth in rental prices since March 2023.

The drop in annual housing inflation was driven by a fall in electricity prices due to payments of government energy rebates to households, the ABS said.

Automotive fuel prices fell 5.5% over the year, following a 1.9% fall in the 12 months to January, according to the ABS.

Source : Bloomberg