<?xml version="1.0" encoding="ISO-8859-1"?> <docID>329636</docID> <postdate>2024-09-24 14:49:19</postdate> <headline>Reserve Bank keeps rates on hold, as expected</headline> <body><p><img class="size-full wp-image-287305" src="https://citynews.com.au/wp-content/uploads/2023/07/IMG_7437-resized-e1689042750221.jpg" alt="Reserve Bank Building, London Circuit, Canberra" width="999" height="666" /></p> <caption>The RBA has once again kept the cash rate unchanged at 4.35 per cent.</caption> <p class="wire-column__preview__author"><span class="kicker-line">By <b>Jacob Shteyman</b> in Sydney</span></p> <p><strong>Australians will experience a calendar year of unchanged interest rates after the Reserve Bank of Australia held the cash rate steady, as widely expected.</strong></p> <p>The key interest rate has been unchanged at 4.35 per cent since November 2023, and will remain there until at least November 5 when the central bank's board next meets.</p> <p>Economists almost universally predicted the RBA would keep the rate on hold on Tuesday, despite its US counterpart the Federal Reserve kicking off its monetary easing cycle with a bumper 50 basis point cut.</p> <p>But the economic imperatives of the two institutions are very different.</p> <p>While inflation in the US has eased to within reach of the Fed's target, the RBA remains concerned more work needs to be done to bring price growth to heel.</p> <p>Underlying inflation is still worryingly high at 3.9 per cent, while the Australian labour market remains in rude health with unemployment at a relatively low 4.2 per cent and participation at a record high.</p> <p>In its monetary policy statement, the Reserve Bank board maintained its hawkish tone and said it would not rule anything in or out in its fight against inflation.</p> <p>"While headline inflation will decline for a time, underlying inflation is more indicative of inflation momentum, and it remains too high," the statement said.</p> <p>"Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range."</p> <p>The board still predicts inflation to return to the target range of two to three per cent in late 2025.</p> <p>"The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome," it said.</p> <p>Tim Lawless, Research Director at CoreLogic Asia Pacific, said the decision to keep rates steady implies the RBA is satisfied with the gradual downward trajectory of inflation.</p> <p>"Overall, the hold decision could provide a boost to consumer sentiment, as more households firm up their opinion that rate hikes are over and the next move from the RBA will be a downwards one," he said.</p> <p>"The only uncertainty at the moment is the timing and speed of rate cuts."</p> </body>