The Reserve Bank of Australia has kept interest rates on hold at 4.1 per cent for the third month straight.
However, the RBA hinted that further increases may be needed to ensure inflation remains under control.
This is the fourth time the RBA has paused its current rate-hiking cycle since it first began raising them in May 2022.
The board meeting was also the last chaired by RBA governor Philip Lowe, whose seven-year term ends next week.
Michele Bullock, the RBA’s current deputy governor, will begin in the role on September 18.
The RBA’s decision to pause rates for another month was in line with the expectations of the majority of economists and financial markets, after inflation cooled to 4.9 per cent in July — lower than what was forecast, but above the central bank’s 2-3 per cent target range.
In his final statement as RBA governor, Lowe warned although inflation was declining, additional rate increases may be needed to curb inflation.
“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable time frame, but that will continue to depend upon the data and the evolving assessment of risks,” he said.
“This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook,” he said.
The RBA still forecasts inflation to return to the target range of 2–3 per cent in “late 2025” and expects unemployment will rise gradually to reach 4.5 per cent by late 2024.
Lowe noted that the Australian economy was experiencing a period of slower growth and was “expected to continue for a while”.