The Reserve Bank of Australia has held rates at 3.85%, in a surprise decision that denies further mortgage relief for millions of Australian households.
The decision will come as a shock to financial markets and a large majority of experts who were sure the RBA board would cut interest rates for a second straight meeting.
Weak growth at the start of the year, inflation at 2.1%, and serious worries about the impact of Donald Trump’s trade war on the global economy were all cited as reasons for a third rate cut of 2025.
The RBA board was split on the decision, with six voting in favour of keeping rates on hold, and three against, shifting away from recent consensus decisions.
The monetary policy board said in a statement that it could “wait for a little more information to confirm that inflation remains on track”.
A potential cut in August will now rely on whether quarterly consumer price data due out at the end of the month shows inflation is under control.
The Australian dollar shot up immediately after the decision to US65.5c, up from US65.15 before the announcement.
Attention now turns to the RBA governor Michele Bullock’s press conference at 3.30pm.
after newsletter promotion
More details soon …
