The Reserve Bank of Australia (RBA) made the decision to maintain the cash rate goal at 4.10%. Noting that the most recent decision will give them more time to evaluate the effects of the current increase. In interest rates and the prognosis for the economy. UOB Group economist Lee Sue Ann analyzes the RBA’s most recent interest rate announcement on July 4.
Though we knew it would be a tough decision, we had planned on a 25bps raise at this conference. While the recent headline inflation decline was encouraging, two important CPI basket items—electricity and rent—could postpone the return of inflation to the RBA’s target range of 2-3%.
The next set of quarterly CPI statistics (2Q23) will be made available. Prior to that, on July 20th, labor market information for June will be released. We predict that the RBA will advocate for a 25 bps rate increase at the monetary policy meeting on August 1. The RBA will also be updating its predictions for inflation and growth at that time.
