Rba Keeps Interest Rate Unchanged

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Rba Keeps Interest Rate Unchanged

RBA Keeps Interest Rate Unchanged At 4.10%

The long-awaited RBA (Royal Bank of Australia) meeting is finally over, as the central bank made no changes to its interest rate policy. By keeping the policy rate unchanged, the RBA governor has made it clear that the tightening cycle is coming to an end.

This development comes as the RBA has finally regained control over the inflation that was once getting out of hand. But now that the inflation problem has been brought under control, there's no longer any point in any new rate hike.

At the September meeting, the interest rate in Australia was kept unchanged near 4.10% as the inflation data is consistent with the central bank's forecasts. The RBA believes that it will be able to achieve an inflation target of 2% to 3% by the end of 2025.

More Rate Hikes Needed To Control Inflation

However, the RBA governor also made it clear that some more rate hikes may needed to control inflation fully, but it is not happening anytime soon.

For the most part, the economists and the market players were also expecting a similar outcome of the September meeting. This conclusion was drawn based on the jobs, wages, and inflation data, which came out to be below expectations. So on that front, there was very little reason for the RBA to go with another rate hike.

After the news, the Australian Dollar (AUD) continued with its bearish trend and was seen near $0.6384 (-1.2%). Such a low exchange rate for the AUD against the USD is one of the lowest for the week.

For the last RBA meeting of 2023, the chances of a rate hike now stand at 30% from the previous forecast of 36%. So, on that front, there's now less chance of any further rate hike for the rest of 2023.

According to the RBA governor, inflation has gone down while the labor market continues to show strength. In addition, the economy is also operating optimally and is fully utilizing its capacity.

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