Financial News: Reserve Bank Of Australia Keeps Rate Steady

Reserve Bank Of Australia Keeps Rate Steady

(RTTNews) - The Reserve Bank of Australia retained its interest rate after a quarter-point cut last month, as policymakers became cautious over rising inflation.

As widely expected, the board governed by Michele Bullock decided to hold the cash rate at 3.60 percent on Tuesday.

Previously, the bank had reduced the rate by 25 basis points each in August, May and February. The current 3.6 percent is the lowest since March 2023.

"With signs that private demand is recovering, indications that inflation may be persistent in some areas and labour market conditions overall remaining stable, the Board decided that it was appropriate to maintain the cash rate at its current level at this meeting," the bank said in a statement.

There are uncertainties about the outlook for domestic economic activity and inflation stemming from both domestic and international developments.

Policymakers said they remain alert to the heightened uncertainty about the outlook and the policy is well placed to respond decisively to global developments.

The board observed that it was appropriate to remain cautious, updating its view of the outlook as the data evolve.

ING economists said the bank will require clear evidence that inflation is sustainably tracking towards the 2.5 percent midpoint of its target before considering further interest rate cuts in November.

They said the probability of a rate cut at the November meeting has meaningfully diminished with the recent uptick in headline inflation.

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