RBA Holds Interest Rates Amid Ongoing Inflation Concerns

The Reserve Bank of Australia (RBA) has decided to leave the cash rate at 4.35%, despite considering a further 0.25 percentage point increase.

This decision came after the Monetary Policy Board weighed up the impact of previous interest rate hikes, which have made financial conditions 'somewhat restrictive' in Australia.

The RBA noted that demand for new housing loans has fallen significantly, particularly among investors, and national housing prices were around 1.5% below their March peak at the time of the meeting.

However, despite these signs that higher interest rates are having an effect, the bank still expressed concerns about inflation risks, with underlying inflation rising to 3.6% in the June quarter and expected to remain above 3% until mid-2027.