RBA keeps interest rates on hold at 4.35 per cent
The Central Bank kept interest rates constant for the first time this year after three consecutive interest rate increases as it aimed to reduce inflation.
On Tuesday, the RBA left the country’s official interest rate unchanged at 4.35 percent, in a widely expected decision.
The Federal Reserve’s three rate hikes since February have added a total of about $300 to monthly repayments on an average $600,000 mortgage.
The bank’s latest decision, which aims to continue tackling inflation while ensuring unemployment does not rise too sharply, comes after latest inflation data showed the consumer price index rose by 4.2 per cent in the 12 months to April, slightly slower than 4.6 per cent in March.
Reduced average inflation, the central bank’s preferred gauge of price pressure, rose 3.4 percent over the same period and continued to rise faster than the bank’s 2 to 3 percent target.
Meanwhile, the latest labor market figures showed unemployment rose from 4.3 percent in March to 4.5 percent in April, reaching its highest rate since November 2021.
Before the decision, markets put the probability of a rate hike by February next year at 64 percent, and a rate cut by November 2027 appeared almost certain.
RBA governor Michele Bullock will provide more information and answer journalists’ questions at a press conference at 15.30.
Millie Muroi is the economics writer for The Sydney Morning Herald and The Age. He was previously an economic correspondent for the Canberra Press Gallery and a banking writer in Sydney.Connect with: X or email.
