Reserve Bank interest rates decision

Published 2:30pm 4 July 2023

Reserve Bank interest rates decision
Words by Kylie Knight

The Reserve Bank of Australia (RBA) has today kept interest rates on hold at 4.10 per cent. It's a welcome reprieve for borrowers. Here’s what it means for you

In a statement, Governor Philip Lowe said:

"Interest rates have been increased by 4 percentage points since May last year. 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 decided to hold interest rates steady this month. This will provide some time to assess the impact of the increase in interest rates to date and the economic outlook.

"Inflation in Australia has passed its peak and the monthly CPI indicator for May showed a further decline. But inflation is still too high and will remain so for some time yet ... the Board’s priority is to return inflation to target within a reasonable timeframe."

Inflation was 5.6 per cent in May.

"The Board is still expecting the economy to grow as inflation returns to the 2–3 per cent target range, but the path to achieving this balance is a narrow one," he said.

"Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve. The decision to hold interest rates steady this month provides the Board with more time to assess the state of the economy and the economic outlook and associated risks."

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