Reserve Bank keeps rates on hold for fifth meeting in a row

Mortgage-holders have avoided another bump in their monthly repayments but have longer to wait for relief, with the Reserve Bank of Australia leaving interest rates unchanged.

Jun 18, 2024, updated Jun 18, 2024
Reserve Bank of Australia headquarters in Sydney. (AAP Image/Bianca De Marchi)

Reserve Bank of Australia headquarters in Sydney. (AAP Image/Bianca De Marchi)

The target cash rate has been left on hold at 4.35 per cent for the fifth meeting in a row, as was widely anticipated by economists for June.

Posturing on future interest rate moves was largely unchanged from the meeting before, with board members still “not ruling anything in or out” and choosing to stay responsive to incoming data.

“Inflation is easing but has been doing so more slowly than previously expected and it remains high,” the RBA board said in its post-meeting statement.

“While recent data have been mixed, they have reinforced the need to remain vigilant to upside risks to inflation.

“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the board is not ruling anything in or out.”

The uncontroversial call followed two days of meetings where board members dissected the latest data as well as the economic significance of state and federal budgets and the workplace umpire’s minimum wage decision.

The RBA started hiking interest rates in 2022 as inflation moved above its two-three per cent target range and kept climbing.

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Since the aggressive hiking cycle began, the economy has slowed significantly, easing demand for goods and services and taking pressure off prices.

Inflation has fallen from its peak of 7.8 per cent in late 2022, but the 3.6 per cent rise clocked in the year to March remains outside the target band.

With the economy sluggish and price pressures easing – albeit not as quickly as hoped – most economists believe the next move will be a cut in interest rates.

The vast majority of a Reuters poll released ahead of the interest rate decision – 38 of the 43 – expected no change in the next quarter before cuts began in the final three months of the calendar year.

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