RBA Holds Cash Rate at 4.35% Amid Global Economic Uncertainty

The Reserve Bank of Australia (RBA) has maintained its cash rate at 4.35% in a unanimous decision, despite predictions from major banks that it would remain unchanged.

In its statement, the RBA said that global oil supply disruptions are adding to inflation and higher fuel prices are being passed through to other goods and services, keeping inflation high for some time.

The RBA also noted that capacity pressures in the economy are contributing to inflation, but stated that growth in aggregate demand needs to remain subdued to bring inflation back to target.

Financial conditions are now tighter than they were, with the economy appearing to slow as expected, but inflation remains too high according to the RBA.

The RBA expects inflation to return to its target range by late 2027, but there are upside risks to this projection. The bank will continue to assess the economy and make decisions accordingly.