Statement by Philip Lowe, Governor: Monetary Policy Decision

Summary:

At its meeting today, the Board of the Reserve Bank of Australia (RBA) decided to maintain the cash rate target at 4.10% and the interest rate paid on Exchange Settlement balances at 4.00%. The Board aims to establish a more sustainable balance between supply and demand in the economy, which will continue to be achieved through higher interest rates. Despite inflation being above target at 6%, the Board expects it to decline to around 3u00bc% by the end of 2024 and return to the 2-3% target range by late 2025. The Australian economy is experiencing below-trend growth, with household consumption and dwelling investment weak. The labour market remains tight, with the unemployment rate expected to rise to around 4u00bd% by late next year. The Board remains committed to returning inflation to target, recognizing the negative impacts of high inflation on the economy and household budgets.