The Reserve Bank of Australia left its cash rate without change at 4.1% at the first policy meeting under new Governor, Michele Bullock.
The central bank extended the rate pause for the fourth consecutive month in a move that came in line with market consensus.
The RBA Board again said inflation had already peaked, but it still remained elevated and would continue to be so for some time.
Still, the monetary policy committee pointed out that some further policy tightening might be required to navigate inflation back down to the target range of 2% to 3% in late 2025.
Policy makers also noted that any rate adjustment would depend on the macro data and the evolving assessment of risks.
Australia’s economic growth was slightly stronger than anticipated during the first half of 2023, but it still remained below trend, the RBA said.
“There was really very little in today’s statement, nothing really new in the statement. It is clear the tightening bias remains, but it is also clear given it’s been four steady rate decisions in a row that the hurdle to hike further is pretty high,” Su-Lin Ong, chief economist at RBC Capital Markets, was quoted as saying by Reuters.
“I don’t think Michele Bullock is all that different to Philip Lowe… They don’t really want to have to tighten any more and they’re prepared to tolerate a slower return to within target inflation.”
The Australian Dollar was last losing 0.70% on the day against its US counterpart, with the AUD/USD currency pair trading at 0.6318. Earlier in the session, the major Forex pair slipped as low as 0.6305, or its weakest level since November 4th 2022.
Meanwhile, markets moved to price a lower chance of a rate hike in November – 36%, compared with 44% prior to the RBA decision.