Reserve Bank of Australia (RBA) Weighted Median Consumer Price Index (CPI) q/q

Reserve Bank of Australia (RBA) Weighted Median Consumer Price Index (CPI) q/q reflects the change in prices for goods and services in the reported quarter compared to the previous one. It is determined by the median of prices (the 50th percentile in the distribution of price changes).

The weighted median index is one of the approaches in estimating the core inflation. The rationale for this approach is that there are sometimes very large or very small changes in the prices of particular goods. This may have a significant effect on a conventional average of all price changes. Such changes however are unrepresentative of price changes of other goods and services. Moreover, expenditure items with very large weights in the CPI basket can add volatility to the average values. For all the above reasons, such "noise" items are excluded from the calculated sample.

This CPI calculation methodology was proposed by the Reserve Bank of Australia. The RBA's governing council needs the most objective assessment of consumer inflation. In turn, it is consumer inflation that is considered one of the main factors in the RBA's interest rate change.

The index growth can have a positive effect on the Australian dollar quotes.