IMF Warns RBA: Be Ready to Hike Rates Again

The International Monetary Fund (IMF) has given the Reserve Bank of Australia (RBA) the green light to further hike interest rates as inflation continues to bedevil the country's economy.

In its latest check-up of the nation's economy, the IMF identified weak productivity growth and the Middle East conflict as major contributors to the ongoing economic challenges facing Australia.

Rising oil prices and hotter-than-anticipated July inflation figures have raised expectations among economists and money markets for at least one more rate rise this cycle, with the IMF stating that the RBA should 'stand ready' to hike rates as needed.

Despite welcoming the federal government's attempts to improve productivity, the IMF called for a 'more ambitious reform strategy' to boost competition, reduce over-regulation and rebalance the tax system.