RBA's August Decision Hinges on Inflation Rate Amid Homeowner Relief

The Australian Bureau of Statistics reported that inflation dropped to 3.8% in June, down from 3.9% in May.

This decrease provides some relief for homeowners who are paying off mortgages, as it may prompt the Reserve Bank of Australia (RBA) to keep the cash rate on hold when they meet on August 11.

LJ Hooker group head of research Mathew Tiller noted that 'it does provide the RBA with a little bit of breathing room if they do, in fact, decide to hold.'

However, underlying inflation remains steady at 3.6%, still above the RBA's target range of between 2 and 3%.

RBA governor Michele Bullock emphasized that further easing in demand would likely be required to bring inflation back down, and that the board is prepared to act as needed, including increasing the cash rate further if necessary.