RBA Holds Cash Rate at 4.35%, Gives Homeowners Reprieve

The Reserve Bank of Australia has decided to keep the cash rate at 4.35 percent for another month, giving homeowners some relief from further mortgage pain. This decision was widely predicted by financial experts, including those at major banks, after last month's inflation figures came in lower than expected.

The consumer price index (CPI) rose 3.8 percent in June, above the RBA's target of between 2 and 3 percent, but significantly lower than predicted. Reserve Bank governor Michele Bullock said the board remains committed to ensuring inflation does not become embedded.

Associate professor of economics at the University of NSW Evgenia Dechter noted that the easing in the economy presents an opportunity for the RBA to wait and see before committing to more changes to the cash rate. The housing market has been declining in recent months, with home values falling 0.7 percent in July, according to Cotality.