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RBA holds cash rate at 4.35% as Bullock flags inflation risks

The RBA left the Official Cash Rate unchanged at 4.35% after its August meeting, extending a pause following earlier 25 basis point hikes.

Reported · Written up by our desk · Central Banks

Reserve Bank of Australia Governor Michele Bullock, speaking at the central bank’s press conference, explained why the RBA left its benchmark Official Cash Rate unchanged at 4.35% after the August monetary policy meeting, according to FXStreet.

Bullock said the board believes the economy is still operating above capacity and that a period of subdued growth is likely needed to reduce inflation, while the RBA is not yet confident it has seen sufficient progress in consumer price dynamics.

The governor noted the RBA is attentive to data and that it is not ruling out further rate rises, adding that the board did not discuss a rate cut at the meeting, only either raising rates again or keeping them at the current level.

FXStreet reports the RBA also pointed to headline inflation that remains too high and efforts to prevent elevated inflation expectations from becoming embedded, while it cited upside risks linked to the Middle East that are still part of the board’s thinking.

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