The Reserve Bank of Australia announced on Tuesday that interest rates will again be held at 4.35 per cent, as the economy remains sluggish.
The cash rate has idled on the same figure following the three RBA decisions already made this year.
Interest rates last budged in November 2023, when they were hiked up from 4.10 per cent — but inflation has proved persistent.
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The latest hold on interest rates was the outcome expected from the RBA’s two-day meeting, one of eight for the year.
All 43 economists polled by Reuters predicted the cash rate would stay there for a fifth meeting in a row.
All but five of them predict there will be no changes to the cash rate in the next quarter, before cuts begin in the final three months of the calendar year.
The RBA board said on Tuesday that “returning inflation to target within a reasonable timeframe” is its highest priority, but noted that recent data suggests the path will be neither smooth nor quick.
“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain, and the board is not ruling anything in or out,” the board said.
“The board will rely upon the data and the evolving assessment of risks. In doing so, it will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market.”
Treasurer Jim Chalmers was quick to address the impact of the decision.
“While we’ve made welcome and encouraging progress in the fight against inflation, it’s not mission accomplished because people are still under the pump,” he said.
“Having rates on hold means a little bit more certainty in tough times for mortgage holders and small businesses.”
He said the budget had forecast a half a percentage point drop in inflation for 2024-25.
“We’re doing our bit in the budget to take pressure off inflation and ease pressure on Australians, with tax cuts for every taxpayer and energy rebates for every household as well as a million small businesses set to roll out from next month.
“Our economic plan is all about fighting inflation and easing the cost of living without crashing the economy, and recent data shows that we’ve got the balance right.”
