RBA holds cash rate steady at 4.35%

• Reserve Bank of Australia leaves its official cash rate unchanged at 4.35%.
• Financial markets and major lenders reacted calmly as the decision aligned with consensus forecasts.
• Policymakers pointed to a cooling domestic economy while warning that inflation remains above target.

The Reserve Bank of Australia has kept its official cash rate unchanged at 4.35% following a unanimous board vote.

The decision marks the second consecutive meeting where policymakers opted against raising borrowing costs, contrasting with three 25 basis point rate increases executed earlier in the year.

"Following three increases in the cash rate target since the beginning of the year, financial conditions are now tighter than they were, and the economy appears to be slowing as expected, but inflation is still too high," the central bank stated.

The central bank noted that inflation is not projected to return to the midpoint of its 2% to 3% target range until late 2027, leaving room for potential further tightening if upside risks materialise.

The monetary policy board previously implemented three successive 25 basis point rate increases in January, February, and May to combat persistent price pressures.

Australia's central bank continues to manage monetary policy, oversee the financial system, and regulate payment operations.