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MNI RBA WATCH: Hold Likely As Economy Softens

(MNI) Melbourne

The RBA will strongly consider holding the cash rate as the economy slows.

The Reserve Bank of Australia board is likely to hold its cash rate at 4.35% after it meets over June 17-18, but weak GDP growth, continued pressure on household spending and decelerating wage gains could soften its language regarding the prospect of further increases.

While inflation according to the monthly CPI indicator has edged slightly higher (See chart), the broad trend of price rises continues to ease and the RBA’s sharpened focus on employment will make it less inclined to make its first hike since May 2023 barring a larger shock, former staffers have told MNI. (See MNI: RBA's Labour Focus To Keep Rates Lower - Ex Staffers)

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The Reserve Bank of Australia board is likely to hold its cash rate at 4.35% after it meets over June 17-18, but weak GDP growth, continued pressure on household spending and decelerating wage gains could soften its language regarding the prospect of further increases.

While inflation according to the monthly CPI indicator has edged slightly higher (See chart), the broad trend of price rises continues to ease and the RBA’s sharpened focus on employment will make it less inclined to make its first hike since May 2023 barring a larger shock, former staffers have told MNI. (See MNI: RBA's Labour Focus To Keep Rates Lower - Ex Staffers)