Reserve Bank of Australia Holds Interest Rate Steady at 4.1% Amid Inflation Caution
Sydney : The Reserve Bank of Australia (RBA) has kept its benchmark interest rate unchanged at 4.1 percent, in line with market expectations, as the central bank continues to monitor inflation trends closely.
Following a two-day meeting, the RBA’s newly established monetary policy board announced on Tuesday that it would maintain the current cash rate, after having trimmed it from 4.35 percent in February. That earlier cut marked the first interest rate reduction since November 2020.
The decision to hold the rate steady comes amid heightened political sensitivity, with Australia’s federal election campaign underway ahead of polling day on May 3. Economists had widely predicted the central bank would opt for a wait-and-see approach.
In its policy statement, the board reaffirmed its commitment to bringing inflation back within its 2–3 percent target range. “The Board is resolute in its determination to return inflation to target in a sustainable and timely manner,” the statement read. “It remains cautious about the outlook and needs confidence that progress will continue.”
Recent figures from the Australian Bureau of Statistics show encouraging signs, with underlying annual inflation easing to 2.7 percent in the 12 months to February — a significant decline from the 7.2 percent peak recorded at the end of 2022.
Tuesday’s decision also marked a milestone for the RBA, being the first rate decision made under its restructured governance model. Under the new framework, the central bank’s responsibilities have been divided, with one board now focused exclusively on monetary policy and another overseeing broader corporate governance.
The RBA’s monetary policy board is scheduled to meet again in late May.
-Agency
