The Reserve Bank of Australia paused rate hikes after three consecutive 25 bps increases but signaled potential further tightening amid persistent inflation.
The Reserve Bank of Australia left its cash rate unchanged at 4.35% in June, pausing after three straight 25 bps hikes since February. The decision reflects an assessment of lagged tightening effects as economic activity shows signs of softening.
While inflation remains elevated, the RBA maintained a hawkish bias, warning it could raise rates again if needed. The central bank cited global energy risks and stagflation concerns but expects restrictive financial conditions and weaker household demand to gradually ease price pressures.
AUD/USD showed little reaction, closing at 0.7067, down 0.07%, as the pause was widely anticipated. Risks to the outlook remain balanced, with inflation still a key concern.