Home›Bonds & Rates›Central Banks›RBA holds cash rate at 4.35% but flags potential furth…

RBA holds cash rate at 4.35% but flags potential further hikes

The RBA cited still elevated inflation at 3.8% year over year to June and warned falling house prices could slow income growth.

Reported · Written up by our desk · Central Banks

The Reserve Bank of Australia held the official cash rate at 4.35%, in a decision widely expected by economists and financial markets after three earlier rate hikes this year, according to the Guardian Business.

In a statement, the RBA said the economy appears to be slowing as expected, while warning it will do what is necessary to bring inflation sustainably back to target, including raising the cash rate further if upside risks emerge.

The central bank acknowledged inflation is still too high, with headline inflation at 3.8% in the year to June, and projected inflation would not return toward the 2.5% target until late 2027, noting there are upside risks to that outlook.

After the decision, the Australian sharemarket rose while the Australian dollar and bond yields fell, a move the report linked to market expectations for lower rates in the future, while treasurer Jim Chalmers called the hold welcome amid global economic uncertainty.

More like this

Sources