MNI BRIEF: RBA Holds Cash Rate At 3.6%

The Reserve Bank of Australia Board unanimously voted to leave the cash rate at 3.6% on Tuesday, citing inflation that remains materially higher than expected, with the trimmed mean rising 1% in the September quarter.

“The recent data on inflation suggest that some inflationary pressure may remain in the economy,” the Board said in a statement following the widely anticipated decision. (See MNI RBA WATCH: Board To Hold, Push Out Midpoint Return)

In its updated forecasts, the Bank lifted its underlying inflation projection by 10 basis points to 2.6% by end-2027, based on a slightly higher assumed cash rate of 3.3%. (See MNI: RBA's Q3 CPI Miss Ups H1 Hike Odds - Ex Research Chief) The Bank also expects unemployment to be 10bp higher at 4.4% over the projection period.

“The Board remains alert to the heightened level of uncertainty about the outlook in both directions,” the statement said, noting that it would remain attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. "In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market. The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.”

Governor Michele Bullock will hold a press conference at 1530 AEDST.