The RBA kept interest rates unchanged for the seventh consecutive time, and markets reacted positively
  SearchFx 2024-09-24 16:52:42
Description:In its statement on monetary policy, the board reiterated its firm determination to return inflation to its 2% to 3% target.

The Reserve Bank of Australia (RBA) left its benchmark interest rate unchanged at 4.35% for the seventh consecutive time at its September 2023 monetary policy meeting, a decision that was fully in line with market expectations. The Reserve Bank of Australia has remained cautious since raising its benchmark interest rate by 25 basis points in November, keeping a close eye on domestic inflation and economic developments.

The RBA kept interest rates unchanged for the seventh consecutive time, and markets reacted positively


In its statement on monetary policy, the board reiterated its firm determination to return inflation to its 2% to 3% target. While inflation remains well above the midpoint of the target range, the board said it would rely on economic data and evolving risk assessments to guide its decisions. It is important to note that headline inflation is expected to temporarily fall further due to cost-of-living relief measures provided by the federal and state governments, but the RBA still does not expect inflation to return to target on a sustained basis until 2026.


The Board also noted that while wage pressures had eased, labor productivity remained low and labor market conditions continued to be tight. This suggests that despite some positive signs in the economy, the RBA will need to remain vigilant to ensure that inflation does not stray too far from target.


After the meeting, the Australian dollar exchange rate showed a positive reaction, the AUD/USD exchange rate rose 0.29% on the day, and renewed the high since 2004, near 0.6860. This reflects confidence in the Reserve Bank of Australia's current monetary policy stance and expectations that it is likely to maintain policy stability in the future.


Reserve Bank of Australia Governor Bullock said at the post-meeting press conference that the recent data did not have a material impact on the policy outlook, so the decision to continue to maintain interest rates unchanged. She also noted that underlying inflation is likely to remain slow in the third quarter, while some risk consumption will remain subdued. Bullock also highlighted the volatility of monthly inflation data, noting that lower energy prices are expected to reduce the cost of living.


Market participants welcomed the RBA's decision, saying it would help maintain steady economic growth and help keep inflation in check. They also noted the Reserve Bank of Australia's cautious approach to the future economic situation and looked forward to seeing more guidance on policy direction at future policy meetings.


To sum up, the Reserve Bank of Australia kept interest rates unchanged for the seventh consecutive time at its September monetary policy meeting, a decision that was well received by the market. Going forward, the Reserve Bank of Australia will continue to closely monitor developments in the domestic economic situation and inflation levels, and take necessary policy measures as needed to ensure stable and sustainable economic development.


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