World can absorb oil rises, bank chief says

The world economy will not face a serious inflation problem even if there is a further significant increase in the price of oil, the governor of the Reserve Bank of Australia said on Thursday.

Ian Macfarlane, whose 10-year tenure makes him one of the world’s longest serving central bank chiefs, said in an interview with the Financial Times that he expected inflation to remain under control even if oil rose above its recent peak of nearly $80 a barrel
.

“There is of course a lot of anxiety about oil and a lot of attention given to the issue worldwide. But what I find most relevant is that we have been able to absorb the increase in oil prices reasonably well, in a way nobody would have predicted two or three years ago.”

“We have got from $20 to $77, so if we were to go to $90, and people are saying that then all hell is going to break loose, I really doubt it,” said Mr Macfarlane, who steps down next month.

Financial Times: World can absorb oil rises, bank chief says