RBA Keeps Cash Rate Unchanged, Flags Further Hikes Ahead

The Reserve Bank of Australia (RBA) decided to keep the cash rate unchanged at 4.35% for a second consecutive meeting, in line with market expectations and Commonwealth Bank of Australia's own forecast.

The decision was unanimous, but the tone of the accompanying statement carried a harder edge than markets had priced. The RBA reiterated its commitment to bringing inflation back to target, including further rate hikes if upside risks materialize.

RBA Governor Michele Bullock stated that both a rate hike and a hold were actively discussed at this meeting, unlike June when only a hold was on the table. She emphasized that another hike is 'quite possible' given persistent Middle East linked inflation risk.