Statement by the Reserve Bank Board: Monetary Policy Decision

Summary:

The Reserve Bank of Australia (RBA) has decided to keep the cash rate target unchanged at 4.35% and the interest rate paid on Exchange Settlement balances at 4.25%. The central bank notes that inflation has continued to moderate, but remains high at 4.1%. Goods price inflation has eased, whereas services price inflation has declined at a slower pace, indicating excess demand in the economy and strong domestic cost pressures. The RBA prioritizes returning inflation to the target range of 2-3% and is prepared to increase interest rates if necessary to achieve this outcome. The outlook remains uncertain due to various risks, including global economic developments and potential changes in domestic demand.