Interest rates on hold - for now

The Reserve Bank of Australia has today decided to keep interest rates on hold for a fourth successive month.

At its meeting, the RBA Board left the cash rate target unchanged at 4.10 per cent and interest rate paid on Exchange Settlement balances at 4 per cent.

Interest rates have risen 4 per cent since May last year. Of that 1 per cent has been this year, but the last rate increase was in June. 

Reserve Bank Governor Michele Bullock said: "The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so. 

"In light of this and the uncertainty surrounding the economic outlook, the Board again decided to hold interest rates steady this month.

"This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook."

|Ms Bullock warned: "Inflation in Australia has passed its peak but is still too high and will remain so for some time yet.| 

"Timely indicators on inflation suggest that goods price inflation has eased further, but the prices of many services are continuing to rise briskly and fuel prices have risen noticeably of late. Rent inflation also remains elevated."

The forecast is for CPI inflation to "continue to decline and be back within the 2–3 per cent target range in late 2025".

"Growth in the Australian economy was a little stronger than expected over the first half of the year. But the economy is still experiencing a period of below-trend growth and this is expected to continue for a while," Governor Bullock says.

And the RBA concluded: "Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks."