THE Reserve Bank made its anticipated decision to maintain the cash rate at 4.35 per cent during its latest meeting. This marks the third consecutive gathering where rates have remained unchanged.
The decision reflects ongoing concerns about inflation, which, although showing signs of cooling, remains above the desired range.
Despite speculation about potential rate hikes, borrowers were spared any immediate increases. However, the possibility of future adjustments has not been entirely ruled out.
“The path of interest rates necessary to ensure inflation returns to target remains uncertain,” stated the post-meeting announcement. “The board will closely monitor global economic developments, domestic demand trends, and inflation and labour market outlooks.”
Since May 2022, the Reserve Bank has implemented 13interest rate hikes, which have notably impacted demand and economic growth. While inflation remains elevated, recent data indicates a faster-than-expected moderation, dropping to 4.1 per cent in the December quarter.
Although economists agree that the next move in interest rates will likely be a reduction, the timing of such cuts remains uncertain. Major banks predict potential cuts in the latter half of 2024, with differing opinions on when these adjustments may commence.
RBA Governor Michele Bullock is scheduled to provide further insights during a press conference later today, Tuesday, March 19, 2024.
