On September 24th, the Reserve Bank of Australia held the cash rate at 4.35 per cent. This reflects ongoing concerns about the impacts of inflation across the broader economy and is the seventh meeting in a row that the central bank has determined to hold the cash rate steady. The RBA’s statement on their monetary policy decision was also released on September 24th. The RBA’s statement indicated that underlying inflation is still too high, and many uncertainties remain around national and global economies. The RBA is concerned that inflation will stay above the target range longer than is sustainable, though GDP data has confirmed that growth is weak. Concerns around aggregate consumer demand, including spending by temporary residents such as students and tourists, high employment, and sustained labour costs & wage growth, are among the factors that the RBA is analysing that interact with the real estate sector. These factors contributed to the RBA’s decision to hold off adjusting the current cash rate since its last determination in August 2024. The RBA has continued to commit to its 2 – 3 per cent target range for inflation.
The RBA has indicated that the consumer price index is currently 3.8 per cent and that returning inflation to its target remains the RBA’s highest priority. Australia’s central bank seeks to reduce inflation to its target range of 2 – 3 per cent by the second half of 2025 and anticipates reaching the midpoint by 2026.
The next announcement on adjustments to the cash rate is set for November 5th, 2024. The RBA’s website has more information.