The Reserve Bank of Australia keeps interest rates steady

Contrary to market expectations of a final rate hike, the Reserve Bank of Australia left interest rates unchanged at 4.10 percent. The Reserve Bank of Australia (RBA) kept interest rates unchanged for the second consecutive month, contrary to market expectations of a final rate hike, for the first time since it began hiking rates in May last year. According to a statement from the RBA, the benchmark interest rate was left unchanged at 4.10 percent. Economists had expected it to increase interest rates by 25 basis points and then end the hike process. While Australian inflation slowed more than expected in the second quarter, the consumer price index rose 6 percent in the second quarter from a year earlier. That’s still well above the RBA’s 2 percent target, but following the 7 percent increase recorded in the first quarter. Australia’s central bank has raised interest rates by a cumulative 400 basis points since May last year, taking it to the highest level in 11 years. The country is grappling with rising inflation as economic activity recovers from the Covid-19 pandemic.