On Tuesday, the Reserve Bank of Australia (RBA) kept interest rates unchanged as expected, reiterating that further rate hikes to control inflation would not be ruled out if necessary. At the conclusion of its June policy meeting, the RBA maintained the interest rate at a 12-year high of 4.35%, a level it has held since raising rates last November.
The market widely anticipated this decision due to the near stagnation of the economy in the first quarter and slower-than-expected wage growth. Economic data indicate that Australia's growth is facing challenges, with weak consumer spending and business investment exacerbating concerns about the future economic outlook.
Nevertheless, the RBA remains vigilant about inflation pressures, stating that it will not hesitate to implement further rate hikes if inflation continues to rise. This suggests that despite the current weak economic data, the central bank remains alert to prevent inflation from getting out of control.
The RBA also noted increasing uncertainties in the global economic environment, with trade tensions and geopolitical risks potentially impacting the Australian economy. In response to these potential risks, the RBA stated it will continue to closely monitor economic conditions and adjust monetary policy as necessary to ensure stable and sustainable growth.
