RBA Keeps Interest Rate Steady at 3.85%, Surprising Markets
RBA Keeps Interest Rate Steady at 3.85%, Surprising Markets

RBA Keeps Interest Rate Steady at 3.85%, Surprising Markets

News summary

The Reserve Bank of Australia (RBA) surprised markets by holding the official cash rate steady at 3.85%, defying widespread expectations of a 25 basis point cut. This decision reflects the RBA's cautious approach amid signs of easing inflation and sluggish economic growth, as well as uncertainties surrounding global trade, particularly U.S. tariffs. Despite inflation cooling to within the RBA's target range and weak retail sales, the Board decided to wait for more data to confirm that inflation remains on a sustainable path. The decision delays potential relief for Australian homeowners in mortgage repayments, with further rate cuts unlikely before the August meeting. The RBA emphasized its commitment to price stability and full employment, noting that monetary policy remains well positioned to respond to economic changes. Economists remain divided on the timing of future rate adjustments, awaiting key data such as the June quarter Consumer Price Index report.

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