RBA Holds Cash Rate at 4.35%, But Future Hikes Remain on the Table

The Reserve Bank of Australia (RBA) has decided to keep the cash rate at 4.35% for now, but hasn't ruled out future hikes if inflation remains above target.

This decision was widely predicted by financial experts, including those from major banks, following last month's inflation figures, which came in lower than expected at 3.8% in June.

RBA governor Michele Bullock reiterated that the bank is determined to keep expectations of higher inflation from becoming embedded in price and wage setting decisions.

The RBA predicts inflation will remain above target until late 2027, but economic factors such as falling house prices and a softening labor market may indicate the three hikes to the cash rate in the first half of the year have been effective.