RESERVE BANK KEEPS RATES ON HOLD
The Reserve Bank of Australia board has determined to maintain the money charge on maintain at 4.1 per cent at its August month-to-month assembly.
WHY?
* Four proportion factors of charge rises since mid-2022 are working to steadiness provide and demand within the economic system.
* Inflation is declining, however remains to be too excessive at six per cent. However, it’s forecast to say no to three.25 per cent by the tip of the 12 months and be again inside the RBA’s two-to-three per cent goal vary in late 2025.
* Labour market circumstances stay very tight however have eased a bit of.
* The Australian economic system is experiencing a interval of below-trend development and that is anticipated to proceed for some time.
WHAT’S NEXT FOR RATES?
* RBA governor Phil Lowe has not dominated out a future money charge rise: “Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon the data and the evolving assessment of risks.”
* Oxford Economics Australia says: “We now expect a protracted pause in rate movements from the RBA that will extend deep into 2024.”
WHAT WAS THE RESPONSE?
“We welcome this pause in the interest rate and hope it is an indicator of the RBA taking a different approach moving forward.” – ACTU secretary Sally McManus.
“We are making progress in this fight against inflation.” – Treasurer Jim Chalmers.
“The impact of the previous rate increases is clearly starting to come through, with household consumption and dwelling investment weakening. The Reserve Bank is right to wait and see what the full impact of the earlier rate increases will be.” – Australian Chamber of Commerce and Industry chief Andrew McKellar.
Source: www.perthnow.com.au
