The last Reserve Bank of Australia policy meeting for the year has seen borrowers spared further cash rate hikes.
An early Christmas boon for Australian mortgage holders, the Reserve Bank has opted to keep interest rates unchanged.
The decision to hold the cash rate at 4.35 per cent was made at the December meeting, a move widely anticipated by forecasters.
This pause comes after a series of increases totalling 425 basis points to the cash rate since May of the previous year, causing an uptick in repayments for those with variable-rate mortgages.
The central bank’s strategy of raising interest rates to curb inflation has seen some success, although inflation remains significantly below the desired two-three per cent range.
In her post-meeting remarks, RBA governor Michele Bullock hinted at possible further tightening in the upcoming months.
“Whether additional monetary policy tightening is necessary to bring inflation back to target within a reasonable timeframe will be dictated by the data and the shifting risk assessment,” stated Ms Bullock.
The decision made in December came after a month of weaker data, including a marked deceleration in the monthly inflation gauge – less comprehensive than the quarterly variant – to 4.9 per cent in October, down from 5.6 per cent in September.
A disappointing retail sales report indicates consumer caution, and both unemployment and underemployment rates are on an upward trend, as anticipated.
