RBA Holds Steady, Eyes May Meeting for Potential Policy Shift

In April 2025, the Reserve Bank of Australia (RBA) held steady the cash rate at 4.10% and the rate on Exchange Settlement balances at 4.00%.The Board members recognized that they did not have enough information to change the central outlook for the Australian economy. They agreed that the May meeting would be a good time to re-evaluate the monetary policy, but the next decision has not yet been made.

The Board noted that inflation was gradually decreasing, with trimmed mean inflation anticipated to drop below 3% in the first quarter of 2025. While the labor market remained tight with high labor costs and low productivity, there were indications it might not be as tight as previously assessed, potentially leading to slower wage growth. The RBA also acknowledged increasing global growth risks, particularly stemming from uncertainties related to U.S. tariffs, which could significantly affect the Australian economy.

Overall, the RBA is taking a careful, data-driven approach, focusing on bringing inflation back to the 2-3% target range while closely watching domestic and global risks. The May meeting is expected to be an important point for possible policy changes, depending on new economic data and events.