RBA leaves interest rates on hold for second consecutive month

The Reserve Bank has left interest rates on hold for consecutive months for the first time since it started raising them in May last year.

The RBA’s cash rate target will remain at 4.1 per cent following today’s board meeting.
At its August board meeting on Tuesday the RBA kept the official cash rate at 4.1% – where it’s remained since June – as inflation continues to track lower and household spending slows.
“The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so,” RBA governor Philip Lowe said in a post-meeting statement, the second last before his term ends in mid-September
“In light of this and the uncertainty surrounding the economic outlook, the board again decided to hold interest rates steady this month. This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook.”
Since reaching a peak of 7.8% in the December 2022 quarter, the annual rate of inflation has been cooling faster than expected with the latest Consumer Price Index easing to 6% in the June 2023 quarter, down from 7% in March.
While that’s still well above the RBA’s 2-3% inflation target, updated forecasts released Tuesday predict CPI will ease to around 3.25% per cent by the end of 2024 and to be back within the target range in late 2025.