RBA interest rates: No sweet surprise for borrowers with cash rate to stay at 3.6 per cent
Aussie borrowers hoping for mortgage relief have been left hanging after the Reserve Bank kept the official cash rate on hold at 3.6 per cent.
The RBA’s board also warned that inflation may be running hotter than it had forecast.
“The decline in underlying inflation has slowed,” the board said in a statement.
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Spending was recovering and the jobs market remained stable, the board said, along with a warning that “inflation may be persistent in some areas”.
“The board decided that it was appropriate to maintain the cash rate at its current level at this meeting,” the statement said.
The decision was unanimous and followed a unanimous decision to lower rates last month.
A cut at today’s meeting — held over Monday and Tuesday — was always unlikely as the RBA has resisted back-to-back moves.
Markets had judged the chance of a cut this month at just 4 per cent.
Analysts were spooked last week by hotter-than-expected inflation data but the full picture will not emerge until late in October when quarterly figures will be released.
The jobs market also remains in good shape, suggesting there’s no rush for the central bank to lower rates and unemployment remains near historic lows at just 4.2 per cent.
Improving growth figures and rising consumer spending led governor Michele Bullock to recently warn in Perth that there may not be many further rate cuts on the horizon.
IG analyst Tony Sycamore said the decision had been “hawkish” — meaning the RBA sounds cautious about cutting.
“Whether the RBA opts for a 25 basis point cut in November will hinge on the September labour force report due in mid‑October and the crucial (quarterly) inflation print due October 29,” he said.
Betashares chief economist David Bassanese said “the tone of the post-meeting statement potentially suggests the RBA is less inclined to cut interest rates in November than previously expected”.
“It’s unclear whether the hawkish tone of today’s statement was simply a justification for why the Bank didn’t cut today or it’s a signal that it’s less inclined to cut interest rates in coming months.”
