RBA Keeps Cash Rate Steady But Warns of Future Hikes

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 after last month's inflation figures came in lower than expected. The consumer price index (CPI) was 3.8% in June, which is above the RBA's target of between 2 and 3%, but significantly lower than predicted.

Reserve Bank governor Michele Bullock said that while inflation would remain above target until late 2027, a number of economic factors, including falling house prices and a softening labour market, indicate that the three hikes to the cash rate in the first half of the year may have been effective in restricting growth.

Bullock emphasized that the RBA's dual mandate is to keep inflation low and employment high, and that they are waiting for more information before making any further decisions on interest rates.