SYDNEY, July 8 (Xinhua) -- Australia's central bank has kept interest rates on hold, defying economists' expectations of a cut.
The monetary policy board of the Reserve Bank of Australia (RBA) met on Tuesday and decided to leave the cash rate target unchanged at 3.85 percent.
Economists at all of Australia's "big four" banks had forecast that the central bank would cut interest rates by 0.25 percentage points for the third time in 2025 at Tuesday's meeting, while financial markets had priced in a 96 percent chance of a cut.
Australia's annual rate of underlying inflation fell from 2.8 percent in April to 2.4 percent in May, according to the latest official data, marking the lowest figure since November 2021.
However, the monetary policy board said in its decision statement on Tuesday that it decided to wait for the June data to confirm that inflation is on track to reach 2.5 percent on a sustainable basis.
It said that there are "uncertainties" about the outlook for domestic economic activity and inflation stemming from domestic and international developments.
The board said that the most extreme outcomes of U.S. tariffs are "likely to be avoided" but that trade policy developments are still expected to have adverse effects on global economic activity.
"Monetary policy is well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia," it said.
The monetary policy board will next meet to consider a rate cut on Aug. 12. ■
