This meeting is the fifth in a row at which the RBA keeps the interest rate steady, after an increase of 25 basis points last November, and today's statement was as follows:
- Fixing interest at the levels of 4.35%.
- Inflation has fallen significantly since it peaked in 2022.
- Conditions in the labor market have improved even more over the past month.
- But it is tighter than is consistent with sustained full employment and inflation at the target.
- The economic outlook remains uncertain.
- The process of returning inflation to the target is unlikely to be smooth.
- There are doubts about the delay in the impact of monetary policy.
- The return of inflation to the target level within a reasonable time frame remains the top priority.
- We must be confident that inflation is moving sustainably towards the target range.
- The inflation rate is declining, but it is proceeding more slowly than previously expected and remains high.
- It will take some time before inflation can sustainably reach the target range.
- The RBA does not exclude anything inside or outside to ensure that inflation returns to the target in a reasonable time frame.
At first glance, there are no significant changes in the language of the statement. The last paragraph and the language of the forward directive are to some extent a copy and paste of the May statementوThe most important thing is that the RBA emphasizes the need to be cautious about the upward risks of inflation and that they do not rule out anything at this stage, of course, including raising interest rates.
The statements of the governor of the Reserve Bank of Australia, Michelle Bullock, were as follows:
- We need a lot to go on our way to bringing inflation back into range.
- There was a discussion about whether to raise interest rates at the meeting.
- But we decided to continue on the path of politics.
- We wanted to point out that we are on alert for bullish risks on inflation.
- It is difficult to get a reading of inflation by quarterly data only.
- We did not take into account the issue of lowering interest rates today.
- But I will not say that the issue of raising the interest rate is increasing.
- We are well aware that high rates harm some sectors of the country.
- Inflation also harms people, so we are focused on reducing it.
The Australian dollar rose slightly as Bullock revealed that raising interest rates was part of the discussion today.
