As expected, the Reserve Bank of Australia (RBA) has chosen to hold the official cash rate at 3.60%, in what was a unanimous decision.
In arriving at its decision, the statement noted that “the decline in underlying inflation has slowed”, with “recent data, while partial and volatile, suggest[ing] that inflation in the September quarter may be higher than expected at the time of the August Statement on Monetary Policy”.
The RBA also noted that the domestic economic outlook remains “uncertain”. While “data for the June quarter show that private demand is recovering a little more rapidly than expected”, “growth in employment has slowed by slightly more than expected”. Wage growth has also “eased from its peak”.
“There are also uncertainties regarding the lags in the effect of recent monetary policy easing, the balance between aggregate demand and potential supply for goods and services, conditions in the labour market and the outlook for productivity”, the RBA statement notes.
The RBA suggested that it would remain data dependent regarding future interest rate decisions, “updating its view of the outlook as the data evolve”.
“The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions”, the statement said.
In other words, a November cut is no certainty.
