RBA holds cash rate steady at 4.35% in August decision

Australia's central bank opted to leave its benchmark

Australia's central bank opted to leave its benchmark interest rate unchanged at its August gathering, pausing after a series of increases implemented during the first half of the year.

The decision, announced on Tuesday, keeps the official cash rate at 4.35 percent, a level that has been maintained for the past two months. This follows three consecutive rate rises earlier in 2024, which had pushed borrowing costs higher for households and businesses.

Economists had widely anticipated the hold, citing softer inflation data and signs of cooling in the labour market. The Reserve Bank's board noted that while price pressures remain above the target band, the pace of increases has slowed, allowing time to assess the impact of previous moves.

In its accompanying statement, the bank reiterated its

In its accompanying statement, the bank reiterated its commitment to returning inflation to the 2-3 percent range, but refrained from signalling any immediate further tightening. Analysts suggest the door remains open for another hike later in the year if economic conditions warrant.

The pause offers some relief to mortgage holders, though many still face higher repayments compared with a year ago. Retailers and property groups welcomed the decision, while warning that persistent cost-of-living pressures continue to weigh on consumer confidence.

Markets reacted calmly, with the Australian dollar trading slightly lower against the US dollar following the announcement. The next policy meeting is scheduled for September, where the board will receive updated economic forecasts.