SYDNEY, Sept. 24 (Xinhua) -- Australia's central bank on Tuesday kept the country's cash rate on hold for the seventh consecutive meeting, even as some other major economies have started to loosen monetary policy to stimulate economic growth.
The board of the Reserve Bank of Australia (RBA) said in a statement that it decided to leave the cash rate target unchanged at 4.35 percent, where it has been since November 2023, and the interest rate paid on Exchange Settlement balances unchanged at 4.25 percent.
The decision, which was in line with economists' expectations, means that Australia's official interest rate will remain unchanged for at least a calendar year, with the RBA board considering changing the rate at its next meeting in November.
In its monetary policy statement, the RBA acknowledged that Australia's rate of inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer to balance.
"But inflation is still some way above the midpoint of the 2-3 percent target range. In underlying terms, as represented by the trimmed mean, inflation was 3.9 percent over the year to the June quarter," it said. "Our current forecasts do not see inflation returning sustainably to target until 2026."
The board said it remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.
"Sustainably returning inflation to target within a reasonable timeframe remains the Board's highest priority," it said. "Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range."
In a statement posted on social media, Treasurer Jim Chalmers said that Tuesday's decision to keep rates on hold was expected.
"There hasn't been a rate hike for almost a year. This reflects the good progress we've made on inflation," he said.
The U.S. Federal Reserve earlier in September cut rates by half a percentage point, joining the European Union, the United Kingdom, Canada, and many other countries in cutting rates in recent months.
Only one of Australia's "big four" banks, the Commonwealth Bank of Australia, is expecting a rate cut before the end of 2024.
Tim Lawless, research director at property data and analytics firm CoreLogic Asia Pacific, told the Australian Associated Press (AAP) that the decision to keep rates steady implies the RBA is satisfied with the general downward trend of inflation.
The Australian Bureau of Statistics (ABS) will on Wednesday release official monthly inflation data for August.
Chalmers said on Sunday that the consumer price index (CPI) data is expected to show encouraging progress in the fight against inflation.
The CPI rose by 3.5 percent in the 12 months to July - down from 3.8 percent in the year to June and the slowest rate of inflation in four months. ■
