MNI BRIEF: RBA Holds Cash Rate At 4.35%

The Reserve Bank of Australia board held the cash rate steady at 4.35% Tuesday, noting it remained vigilant against upside risks to inflation.

In a statement, the board noted the economic outlook remained uncertain and recent data have demonstrated “the process of returning inflation to target is unlikely to be smooth.”

“There is uncertainty around consumption growth," the board said. "Real disposable incomes have now stabilised and are expected to grow later in the year, assisted by lower inflation and tax cuts. There has also been an increase in wealth, driven by housing prices. Together, these factors are expected to support growth in consumption over the coming year. But there is a risk that household consumption picks up more slowly than expected, resulting in continued subdued output growth and a noticeable deterioration in the labour market.”

The board’s decision was largely anticipated. (See MNI RBA WATCH: Hold Likely As Economy Softens) It has now held the cash rate steady since it last hiked it 25 basis points in November 2023.

Governor Michele Bullock will address the media at 3:30pm (AEST).