FLAU - Australia holds cash rate for fourth time at 4.35% despite higher than expected inflation
2024-05-07 03:21:36 ET
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The Reserve Bank of Australia kept its cash rate unchanged at 4.35% during its May meeting, as widely expected, but offered no explicit hawkish message that markets were anticipating.
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The central bank maintained borrowing costs for the fourth time since it was last raised in November 2023, acknowledging that returning inflation to target was unlikely to be smooth.
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The board also kept the interest rate on Exchange Settlement balances unchanged at 4.25%.
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"Recent data indicate that, while inflation is easing, it is doing so more slowly than previously expected and it remains high. The Board expects that it will be some time, yet before inflation is sustainably in the target range, and will remain vigilant to upside risks," the board added.
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Still, the RBA acknowledged that the recent progress on bringing down inflation has stalled and maintained their forward guidance of "not ruling anything in or out."
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The Australian dollar fell to around $0.66, retreating from two-month highs after the move.
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Australia's March goods trade surplus narrows to more than 3-year low as imports jump
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Australia's Q1 annual inflation slows less than expected; monthly CPI above forecasts
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Australia's manufacturing PMI rises to 49.9 in April; services PMI edge lower to 2-month low
- RBA minutes: The bank not ruling in or out interest rate moves aims to return inflation target
- Australia's Monthly CPI inflation softer-than-expected to 3.4% in the year to February 2024