In its latest monetary policy decision on the 6th of February, the Reserve Bank of Australia (RBA) has chosen to hold the cash rate target at 4.35%.
The RBA’s decision to hold rates steady is informed by the latest inflation data, which shows a continued moderation in inflation.
However, despite easing slightly in the December quarter, inflation remains high at 4.1%.
While there are positive indicators, the economic outlook remains highly uncertain. The Ukraine and Middle East conflicts along with uncertainties surrounding the Chinese economy pose significant inflation risks. So to do uncertainties regarding the lagged effects of earlier rate hikes, firms’ pricing decisions, and the household consumption outlook.
Returning inflation to the target range of 2-3% remains the RBA’s objective. Despite recent signs of easing inflation, the RBA anticipates that it will be some time before inflation stabilizes within the target range.
In other words, the RBA is not ruling out further rate rises.
To read more about the RBA monetary policy decision, check out the Media Release and Statement on Monetary Policy.
If you want to find out more about how the RBA’s decision affects you, or to discuss your lending options, get in touch.
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