As expected, there is no movement on interest rates in today’s Reserve Bank of Australia statement on monetary policy.
The Reserve Bank left the cash rate unchanged at 4.35%.
The Reserve increased the cash rate by 0.25% at its November meeting. Since then a 4.9% inflation rate has been recorded, easing the pressure on the bank for one more rate increase.
In its statement today, the Reserve Bank said:
The limited information received on the domestic economy since the November meeting has been broadly in line with expectations. The monthly CPI indicator for October suggested that inflation is continuing to moderate, driven by the goods sector; the inflation update did not, however, provide much more information on services inflation. Overall, measures of inflation expectations remain consistent with the inflation target. Wages growth picked up in the September quarter but this was expected given that it captured the earlier Fair Work Commission decision on award wages. Wages growth is not expected to increase much further and remains consistent with the inflation target, provided productivity growth picks up. Conditions in the labour market also continued to ease gradually, although they remain tight.”
Watch Treasurer Jim Chalmers respond to the RBA’s decision (23m):