01/04/2025
RBA Cash rate stays 4.1
The Reserve Bank of Australia (RBA) has skipped on delivering its own April Fools' surprise, deciding to keep the nation's cash rate on hold just weeks out from the federal election.
Meeting for the first time under its new dual-board structure, the RBA monetary policy board left the cash rate target at 4.10 per cent, having delivered a long-awaited cut in February.
The decision to keep rates on hold comes amid favourable inflation data and news the nation's housing prices hit a new record high in March, just a month after the first interest rate cut in five years.
Meeting for the first time under its new dual-board structure, the RBA monetary policy board left the cash rate target at 4.10 per cent, having delivered a long-awaited cut in February.
In its monetary statement, the board said it was closely watching global economies to understand the impact of US-led tariffs.
"Uncertainty about the outlook abroad also remains significant. On the macroeconomic policy front, recent announcements from the United States on tariffs are having an impact on confidence globally and this would likely be amplified if the scope of tariffs widens, or other countries take retaliatory measures," the monetary policy board said.
"Geopolitical uncertainties are also pronounced.
"These developments are expected to have an adverse effect on global activity, particularly if households and firms delay expenditures pending greater clarity on the outlook."
Despite today's pause, many economists still forecast the RBA to drop interest rates further in 2025.
"The outlook for interest rates remains positive, with the cash rate likely to reduce further in 2025, but only gradually," said Tim Lawless, Research Director at CoreLogic.
"The quarterly inflation outcome, which will be released on April 30th ahead of the RBA's next board meeting, will be a key factor influencing the RBA's decision in May.
"If core inflation holds below the 3 per cent mark, which seems highly probable, it is looking more likely that we will see a second cut to the cash rate."