- Prior 3.60%
- Monetary policy operates with a lag
- The full effect of this substantial increase in interest rates is yet to be felt
- The Australian banking system is strong, well capitalised and highly liquid
- A range of information suggests that inflation has peaked in Australia
- The labour market remains very tight
- As economic growth slows, unemployment is expected to increase
- Expects that some further tightening may well be needed to ensure that inflation returns to target
- The decision to hold rates gives more time to assess the state of the economy and the outlook
- Full statement
After a bit of a tiny whipsaw, the aussie is now tracking lower with AUD/USD dropping from 0.6780 to 0.6760 as the RBA leaves the cash rate unchanged this month. They do leave the door open for further tightening in the months ahead but the language on that also suggests that even if it does come, perhaps there might just be one more rate hike only.
The change is that they now emphasise that there is only "some further tightening" that may well be needed instead of previously saying that "further tightening" will be needed. It's subtle but it is a change.
Besides that, the language and guidance on assessing when and how much to raise rates further remains unchanged.
