The Reserve Bank of Australia has announced that it is holding interest rates at 4.10% as it assesses the impact of previous rate hikes on the economy.
The decision to hold interest rates steady comes as inflation in Australia declined to an annualized rate of 6% in the second quarter from 7% in this year’s first quarter.
While inflation is decelerating in Australia, it remains well above the Reserve Bank’s target of 2%.
The latest decision to hold rates in place came as a surprise as a majority of economists surveyed by the Reuters News Agency expected a 25-basis point increase.
The central bank warned that it is prepared to resume its interest rate increases if inflation remains elevated or economic data warrants further hikes.
The Australian dollar extended earlier losses against the U.S. dollar after the interest rate announcement, trading down 0.7% at 0.67 to the greenback.
Australia’s central bank has now lifted interest rates by a total of 400 basis points since May 2022. The central bank’s key rate is sitting at an 11-year high.
