Source: Sharecast
In a widely expected decision, the cash rate was left at 4.35%. The RBA’s rate-setting board said “some of the upside risks to inflation appear to have eased” and ditched a longstanding line that it would not rule anything in or out on policy.
The Australian dollar fell as much as 0.9% against its US counterpart in response to the announcement, while three-year government bond yields dropped 8 basis points after the statement.
Traders had been keeping a keen eye on the RBA meeting after disappointing GDP data last week.
“Recent economic data have been mixed and some indicators are softening in line with our forecasts,” RBA Governor Michelle Bulloch told reporters after the decision.
“This has given the board some confidence that inflationary pressures are declining, but risks remain.”
Analysts at Oxford Economic said it was “positive that the board is seeing progress on inflation returning to target” but believed it would still need to see two more inflation prints where underlying inflation eased before members had enough confidence to cut rates.
“Accordingly, we do not see rates being cut until May,” they added.
Reporting by Frank Prenesti for Sharecast.com