Home topics news Reserve Bank of Australia. Source: RBA News News RBA leaves interest rate on hold at 4.35% Yajush Gupta May 8, 2024 The Reserve Bank of Australia (RBA) has decided to maintain its cash rate at 4.35% for the fourth consecutive meeting, sparing borrowers from a 14th interest rate hike. Despite inflation’s slower retreat than previously anticipated, the RBA refrains from adopting a “tightening bias.” Governor Michele Bullock, addressing a press conference in Sydney, affirmed the RBA’s neutral stance, acknowledging considerations for a rate increase at the recent meeting. The RBA statement remains largely unchanged, emphasizing vigilance regarding inflationary risks. Following the announcement, the Australian dollar dipped to 66.1 US cents, signalling market response to the absence of hawkish language. Meanwhile, stocks surged, with a gain of over 1.4% by the end of the day. Before last month’s unexpected inflation figures, economists and investors had anticipated potential rate cuts as early as September. However, the RBA’s recent decision suggests a more patient approach, especially considering Australians’ vulnerability to variable interest rates and mounting borrowing costs. The RBA’s quarterly statement on monetary policy revised down Australia’s GDP growth target, aiming to counteract near-term inflationary pressures. Despite the adjustment, the RBA maintains optimism about achieving its inflation target range of 2%-3% by the end of 2025. However, challenges persist, with real wage increases slowing down and government spending potentially exceeding expectations, which could hinder inflation mitigation efforts. The RBA identifies higher petrol prices as a factor driving near-term inflation. While