The Reserve Bank of Australia left rates unchanged, signaling comfort with lagged policy effects amid cooling growth and inflation concerns.
The Australian dollar retreated modestly after the Reserve Bank of Australia unanimously kept its cash rate at 4.35%, ending a streak of three consecutive hikes this year. The decision followed softer economic momentum, including slowing consumer spending and a shift in the housing market, where prices have fallen in some cities.
The RBA acknowledged tighter financial conditions from prior hikes but noted inflation remains elevated. While growth is cooling, the central bank left the door open for further tightening if needed, citing persistent inflation pressures, including pass-through from higher oil prices.
Markets had pared back expectations for additional rate hikes ahead of the meeting, contributing to the AUD’s pullback after strong year-to-date gains. The currency failed to reclaim the 0.7100 level, reflecting cautious sentiment.