The Reserve Bank of Australia kept the interest rate unchanged at 4.10, contrary to market expectations for a recent rate hike.
The Reserve Bank of Australia (RBA) kept interest rates steady for the second month in a row for the first time since it began raising interest rates in May last year, contrary to market expectations for a final rate hike.
According to the statement from the RBA, the benchmark interest rate was left unchanged at 4.10 percent. Economists’ expectation was that it would raise interest rates by 25 basis points and then end the increase process.
Although Australian inflation slowed more than expected in the second quarter, the consumer price index rose 6 percent in the second quarter from a year ago. That’s still well above the RBA’s 2 percent target, but the 7 percent increase recorded in the first quarter.
Australia’s central bank has raised interest rates by a cumulative 400 basis points since May last year, pushing it to an 11-year high. The country is grappling with rising inflation as economic activity recovers after the Covid-19 outbreak.