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The Reserve Bank of Australia, on April 1, 2025, said it would keep the cash rate steady at 4.10%, as expected by markets following a February rate cut. The RBA reiterated that underlying inflation is coming down from its peak in 2022 and emphasized the importance of observing sustained inflation returning to the 2-3% target band.
Even accepting inflation has run out of steam, the RBA is wary of the unknowns of what lies ahead for the economy and inflation and is moving cautiously. The RBA considers monetary policy stance as at the moment tight and ready to move interest rates if conditions warrant, due to international developments and domestically within the economy.
The RBA will pay attention to changing data and risks and use them in future monetary policy, closely following world economic trends and maintaining its watchful eye over domestic demand. The move comes as the Australian government remains in caretaker mode ahead of the May 3, 2025, election, which may shape economic psychology and deliberation over policy.
