Australia: RBA on hold for final meeting of 2024 – UOB Group

As expected, the Reserve Bank of Australia (RBA) decided to leave its cash rate target unchanged at a 13-year high of 4.35%. It has now been more than a year since the RBA’s last rate move, the 13th increase in a series that began in May 2022. It also kept the interest rate paid on Exchange Settlement balances unchanged at 4.25%, UOB Group’s Economist Lee Sue Ann notes.

RBA keeps rates at a 13-year high of 4.35%

“The Reserve Bank of Australia (RBA) kept rates at a 13-year high of 4.35% earlier today (10 December), as expected. The Board acknowledged that it is gaining some confidence that inflationary pressures are declining in line with these recent forecasts, although risks remain.”

“The RBA had opted not to raise rates as high as other central banks during the 2022-23 tightening cycle in an effort to safeguard the labor market, which remains a bright spot. However, that has led to inflation lingering more persistently in Australia.”

“Employment figures due later this week (12 December) are predicted to show the unemployment rate edging higher to 4.2% in November. As for inflation, the release of 4Q24 inflation data is not till 29 January, just ahead of the RBA's first policy meeting next year on 18 February. For now, we do not expect the RBA to cut rates until 1Q25 at the earliest.”