Australia’s central bank left its benchmark interest rate unchanged for the third straight meeting as inflation is expected to return to the target in a reasonable time. <\/p>\n
At the final board meeting of Philip Lowe as governor, the policy board decided to hold the cash rate target at 4.10 percent. The decision matched economists’ expectations. <\/p>\n
The interest rate paid on Exchange Settlement balances was kept unchanged at 4.00 percent.<\/p>\n
The RBA has raised the key rate by 4 percentage points since May last year. The board observed that the higher interest rates are working to establish a more sustainable balance between supply and demand in the economy<\/span> and will continue to do so.<\/p>\n Today’s decision to retain the rate will provide further time to assess the impact of past tightening and the economic outlook.<\/p>\n The bank expects inflation to return to the 2-3 percent target range in late 2025. The economy is forecast to continue to grow below-trend for a while. <\/p>\n The board noted significant uncertainties around the outlook. Service price inflation remained persistently high overseas and the same could occur in Australia. <\/p>\n The outlook for household consumption remains uncertain. Globally, there was increased uncertainty around the outlook for the Chinese economy due to ongoing stress in the property market, Lowe said. <\/p>\n Lowe said some further tightening of monetary policy may be required to ensure that inflation return to target in a reasonable timeframe. Nonetheless, future action will continue to depend upon the data and the evolving assessment of risks, the governor added.<\/p>\n The central bank’s next move will be a rate cut, perhaps as early as the first quarter of 2024, Capital Economics’ economist Marcel Thieliant said. <\/p>\n