International

Australia's central bank keeps cash rate unchanged

December 05, 2023

Canberra, Dec 5

The Reserve Bank of Australia (RBA) on Tuesday decided to keep the cash rate target on hold at 4.35 per cent, after raising the rate by 25 basis points last month.

Following a monetary policy meeting, RBA Governor Michele Bullock said in a statement that holding the cash rate steady at this meeting would allow time to assess the impact of the increases in interest rates on demand, inflation and the labour market.

The limited information received on the domestic economy since the November meeting had been broadly in line with expectations, she said.

The monthly consumer price index (CPI) indicator for October suggested that inflation is continuing to moderate, driven by the goods sector, Bullock said, adding that the inflation update did not provide much more information on services inflation.

The country's monthly CPI eased to 4.9 per cent in the year to October, as against the annual increase of 5.6 per cent seen in September, according to the Australian Bureau of Statistics.

Wages growth is not expected to increase much further and remains consistent with the inflation target, Bullock said.

She insisted that returning inflation to target within a reasonable timeframe remained the RBA Board's priority.

Last month, the central bank increased interest rates by 25 basis points in a decision that reflected the Board's view that progress in bringing inflation back to the target range of 2-3 per cent was looking slower than earlier forecast.

 

 

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