RBA Keeps Interest Rates Steady Amid Hawkish Tone

The Reserve Bank of Australia has kept interest rates steady for a second consecutive meeting, despite higher-than-expected inflation and rising petrol prices.

In a unanimous decision, the RBA's monetary policy board left the cash rate unchanged at 4.35 per cent on Tuesday.

Although falling house prices and lower-than-expected inflation contributed to the decision, both headline and underlying inflation remain above the bank's target range of two to three per cent.

RBA Governor Michele Bullock warned that the bank would not hesitate to raise interest rates again if upside risks to inflation materialised, citing global events such as the Middle East oil disruption and the El Nino weather pattern threatening food prices.

Economists view the decision as a 'hawkish pause', rather than an indication that the tightening cycle has ended, with some cautioning that the economy may slow further if housing market conditions deteriorate.