Australia Central Bank Holds Rate At 12-Year High; Hawkish On Future Path
(RTTNews) - The Reserve Bank of Australia decided to keep its benchmark interest rate unchanged as expected on Tuesday but suggested that another rate hike cannot be ruled out, pushing forward the market expectations about the timing of the policy easing to the second half of the year.
The policy board of the RBA, led by Governor Michele Bullock, decided to maintain the cash rate target at 4.35 percent.
The RBA board also retained the interest rate paid on exchange settlement balances at 4.25 percent.
The central bank has increased its cash rate target by 425 basis points since May 2022. The current 4.35 percent is the highest since late 2011.
The bank said it remains highly attentive to inflation risks and kept its inflation outlook unchanged. Inflation is projected to return to the target of 2-3 percent in 2025.
The RBA board noted that the economic outlook is uncertain despite encouraging signs.
Although recent data suggests that inflation is easing, it remains high, the bank said.
"The Board expects that it will be some time yet before inflation is sustainably in the target range," the RBA added.
"The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out," the bank said. Capital Economics economist Abhijit Surya said the bank poured cold water on the prospects of early rate cuts and it now looks increasingly unlikely that the RBA will start cutting rates by May.
Australia Manufacturing PMI Sinks Into Contraction - S&P Global
Australia Inflation Rises In August
Australia Lifts Interest Rate To 4.60%; Highest Since Late 2011
Australia Services PMI Ebbs In August - S&P Global
Australia GDP Growth Tops Expectations
Australia Has A$27.2 Billion Current Account Shortfall
Australia Building Consents Sink 3.6% In July
