The Reserve Bank of Australia has delivered a pre-Christmas reprieve for Australia’s borrowers, leaving its cash rate unchanged at 4.35%.
Why it matters: The central bank held its last policy meeting until February 2024. In the previous month, the bank revised its inflation forecast for Australia, indicating that it will take longer to reduce prices than initially anticipated.
What has changed: While traders across the world have been increasing rate cuts in the US and other countries, the RBA has been an outlier. Local data indicates a decline in employment and inflation, but Governor Michele Bullock cautioned last week that it is uncertain whether inflation would meet the target over the next two years.
What’s next: The RBA reconvenes in February after an extended summer break, so January’s quarterly inflation report will be key.