In a close call, the Reserve Bank of Australia’s Board has decided to leave the cash rate target unchanged at 3.60%, for the first time in nearly one year.
The majority of economists expected the central bank to press pause, and the RBA says it’ll give more time for the previous rate rises to be felt, and to assess the impact of the increases to date as well as the economic outlook.
The RBA also referenced consumer spending from February’s annual increase of 6.8%, down from the peak of 8.4% last December, which suggests inflation has peaked in Australia.
With rents increasing at the fastest rate in some years, and the prices of utilities rising quickly, inflation should decline this year and next, to around 3% in mid-2025, but RBA Chairman Philip Lowe says further monetary tightening is still expected.