RBA Keeps Cash Rate at 4.35% Amid Ongoing Inflation Concerns

The Reserve Bank of Australia (RBA) has decided to keep the cash rate at 4.35% for now, after last month's inflation figures came in lower than expected.

Although the consumer price index (CPI) was still above the RBA's target of between 2 and 3%, it was significantly lower than predicted, coming in at 3.8% in June.

RBA governor Michele Bullock said that while inflation is expected to remain above target until late 2027, a number of economic factors suggest that the three hikes to the cash rate in the first half of the year may have been effective in restricting growth in the economy.

Bullock emphasized that the RBA's position remains that future hikes would still be on the table if inflation remains above target, but for now, they are waiting to assess whether the economy is evolving as expected.