Connect with us

Business

RBA Keeps Interest Rates on Hold Despite Decreasing Inflation

Published

on

Rba Keeps Interest Rates On Hold Despite Decreasing Inflation

The Reserve Bank of Australia (RBA) has made the decision to keep interest rates unchanged, despite recent data indicating a faster decrease in inflation than expected. This decision, part of the RBA’s new interest rate schedule, keeps the cash rate target at 4.35 per cent, avoiding additional burden for borrowers.

The Australian Bureau of Statistics (ABS) reported that inflation has cooled significantly, reaching a two-year low. However, RBA Governor Michele Bullock noted that while inflation is easing, it remains high and it will take time before it reaches the target range. She also emphasized that the path of interest rates will depend on data and risk assessment, and further rate increases are possible.

Consumer research head at Finder, Graham Cooke, highlighted the relief this decision brings to struggling households dealing with the cost of living. He also mentioned that some banks have started easing rates on fixed-rate home loans in anticipation of future rate cuts.

Anneke Thompson, Chief Economist at CreditorWatch, suggested that a rate cut may be considered in the middle of the year if inflation continues to fall faster than predicted. Thompson also mentioned that major overseas economies are experiencing rapid inflation declines and their central banks might consider interest rate cuts soon.

While inflation has improved, the Organisation for Economic Co-operation and Development (OECD) has cautioned against swiftly cutting interest rates. It recommends maintaining tight monetary policy to ensure that inflationary pressures are durably contained. The OECD expects consumer price growth to fall to 3.5 per cent by mid-year and further ease to 2.75 per cent by mid-2025.

The RBA’s decision marks a new era as it transitions to holding eight, two-day board meetings per year and providing fresh forecasts alongside the interest rate announcement. This comes after an independent review of the RBA’s operations aimed at enhancing communication and internal deliberations.

Rachel Adams

Times News Global is a dynamic online news portal dedicated to providing comprehensive and up-to-date news coverage across various domains including politics, business, entertainment, sports, security, features, opinions, environment, education, technology and global. affairs. Our commitment lies in sharing news that is based on factual accuracy, credibility, verifiability, authority and depth of research. We pride ourselves on being a distinctive media organization, guided by the principles enshrined in Article 19 of the Universal Declaration of Human Rights. Made up of a team of ordinary people driven by an unwavering dedication to uncovering the truth, we publish news without bias or intimidation.