Official interest rates have been on hold since November of last year, and the Reserve Bank has done so once more.
Following the board's fourth two-day meeting of the year, the decision was just handed out.
It is consistent with the consensus among economists that there would be no change from 4.35 percent.
Borrowers may have to wait months longer for interest rate reduction as a result of the RBA's stalled progress in reducing inflation. It is generally anticipated that rates will remain unchanged until at least late 2024.
In its statement outlining Tuesday's decision, the bank board stated that "inflation has decreased substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer into equilibrium."
"However, the most recent data shows that the rate of fall has slowed, with inflation remaining significantly higher than the middle of the 2–3% goal range."
Pressure on mortgage holders increased as a result of rapid interest rate hikes starting in May 2022 due to soaring inflation. With monthly home loan repayments roughly $1500 higher on a $600,000 loan over 30 years compared to April 2022, comparison website Canstar claims that the rising interest rates are putting a burden on household budgets.
However, the central bank last raised interest rates in November 2023, which was seven months ago.
The cash rate would remain there for a fifth consecutive meeting, according to the predictions of all 43 economists surveyed by Reuters.
Before cuts start in the last three months of the year, the overwhelming majority (38 of the total) anticipate no change in the upcoming quarter. Of the economists surveyed, only one anticipates a raise as the next step.
According to the March quarter national accounts, the economy has slowed to a crawl, yet inflation has persisted and the employment market has been reluctant to recover.
In addition, the board took notice of those developments and restated an important point that has always been included in its monthly rate-holding decision.
It stated, "The board is not ruling anything in or out, and the path of interest rates that will best ensure that inflation returns to target in a fair timeframe remains uncertain."
The March quarter national accounts, the Fair Work Commission's decision to raise the minimum wage by 3.75 percent (about $33 per week) starting July 1, and state and federal budgets were among the other significant facts that the board had to review.
Prime Minister Anthony Albanese stated ahead of the bank's release that the government had included cost-of-living measures, such energy bill refunds, in the May budget to "put downward pressure on inflation."
He told ABC radio, "We have created 880,000 jobs and are offering rises in real wages as well as tax cuts, in contrast to those in the Coalition who are talking about the need for austerity budgets like we saw in 2014 that really impacted people."
“We want to make sure that we put inflation down without penalizing people.”
According to Matthew Hassan, senior economist at Westpac, the RBA should feel somewhat reassured that the economy is developing as anticipated during the last six weeks.
"But before it can relax, much alone be confident enough about meeting its inflation objective that it can start to modify its attitude," he wrote in a note, "it will be waiting for a bit more data around inflation."
The central bank targets inflation between two and three percent.
Unsurprisingly, hardship rates are also rising in other data that illustrates how higher rates are harming people throughout Australia. According to credit reporting company Equifax, the number of mortgage holders contacting lenders for help has increased by 21.5%.
Insolvencies among small enterprises and single proprietors are at their highest level since 2015, particularly in the construction and hospitality industries.
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