RBA Keeps Cash Rate Steady at 4.35%, Cites High Inflation Risks

The Reserve Bank of Australia (RBA) left its cash rate unchanged at 4.35% in its August monetary policy meeting, as expected by markets.

The RBA acknowledged that headline inflation is still too high and that short-term measures of inflation expectations have eased but remain higher than earlier in the year.

Despite this, the bank noted that there are heightened uncertainties about the outlook for domestic economic activity and inflation, both domestically and internationally.

The RBA emphasized its focus on ensuring that high inflation does not become embedded, and warned that inflation is not expected to return to around the midpoint of the target range until late 2027. It also acknowledged upside risks to this projection.