RBA expected to hold rates
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The Reserve Bank of Australia is expected to leave the official cash rate unchanged at 4.35% in the latest monetary policy decision on Tuesday.
Economists from all four major Australian banks expect no change to interest rates and a survey found that 42 of 45 economists expect the cash rate to remain unchanged
The RBAβs Monetary Policy Board started its two-day meeting on Monday and is evaluating whether any additional measures are required to return inflation to its target range.
Inflation has fallen from previous highs but it is still above the central bankβs preferred level and Economists have pointed out that earlier rate increases have already played a major role in reducing demand and limiting price pressures across the economy.
A ceasefire and improved relations between Iran and the United States might ease immediate concerns but analysts believe shipping activity through the Strait of Hormuz may take several months to fully normalise.Β
The Governor is expected to announce the outcome on Tuesday afternoon after the board meeting.
If the RBA leaves rates unchanged then it would be the first meeting in 2026 without an interest rate increase following three consecutive rate hikes earlier this year.Β
Many economists expect the cash rate to stay at 4.35% through September and some analysts also believe the next policy move could eventually be a rate cut in 2027 if inflation continues to ease and economic conditions weaken.
(Source: Reuters)
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