Wednesday, July 24, 2024

Reserve Bank of Australia keeps cash rate unchanged

The Reserve Bank of Australia (RBA) on Tuesday kept the cash rate unchanged at 4.1 per cent.

But it warned that further tightening policy may be required to ensure inflation returns to the 2-3 per cent target range in a reasonable timeframe, reports Xinhua news agency.

Inflation in Australia has passed its peak and the monthly consumer price index (CPI) indicator for May showed a further decline, RBA Governor Philip Lowe said in a statement on Tuesday.

Inflation is still too high and will remain so for some time yet, he said.

The decision to hold interest rates steady this month provides the central bank with more time to assess the state of the economy and the economic outlook and associated risks, he said.

Lowe pointed out that interest rates had been increased by 4 percentage points since May last year, which are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so.

He noted that the central bank “remains resolute in its determination to return inflation to target and will do what is necessary to achieve that”.

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