Reserve Bank of Australia Deputy Governor Sarah Hunter stated that despite a weakening domestic property market, the central bank's board continues to treat high inflation as its top priority, potentially necessitating further interest rate increases to combat persistent price pressures.

Speaking at a Sydney conference on Tuesday, Hunter emphasized the board's firm stance, saying, "The board has been very clear that it is not prepared to tolerate inflation remaining above target for an extended period. If actual inflation trends come in above our forecasts, the board will likely have no choice but to address this through further rate hikes."

Driven by stronger-than-expected inflation and economic data, the Reserve Bank of Australia faces mounting pressure, with market expectations growing for a resumption of rate increases as early as this month. Money markets are currently pricing in a 69% probability of a rate hike within three weeks, and have fully priced in a move at the November policy meeting.

However, Hunter cautioned that July's inflation figure, being a monthly data point, may be subject to volatility. RBA officials have made clear they place greater reliance on quarterly reports when assessing the domestic inflation landscape.

The central bank has struggled to bring inflation back to the midpoint of its 2-3% target range, a goal not expected to be achieved until early 2028. Should the cash rate be lifted from its current 4.35% to 4.6%, borrowing costs would reach their highest level in approximately 15 years.