The Reserve Bank of Australia (RBA)’s August 2024 decision is to keep the cash rate at 4.35% for the sixth consecutive time. Thefollows a two-day board meeting.
The RBA’s target range for inflation is 2-3%. Most recent data shows that current inflation is 3.8%.
Despite keeping the rate the same, the RBA said Australia’s economic outlook remains “highly uncertain” and that inflation is “still some way above” the target. It says it “will do what is necessary” to return inflation to its target.
About the RBA
The RBA is Australia’s. Its key responsibility is setting the ‘cash rate‘ — an interest rate it charges commercial banks for short-term loans.
This rate influences the cost of borrowing across the economy, so changes to the cash rate are often called changes to ‘interest rates’.
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The RBA has regularly raised interest rates over the last two years to fight rising prices (inflation) by curbing spending. The current cash rate is 4.35%. It was 0.10% at the start of 2022.
The RBA’s decision
The RBA’s August 2024 rate decision comes amid global economic uncertainty, after weaker-than-expected jobs data from the U.S. on Friday triggered a plunge in global share markets.
The ASX200, which includes Australia’s 200 biggest publicly listed companies, dropped 3.7% on Monday — the worst single-day drop since May 2020.
On Tuesday, before the RBA’s announcement, there were signs the market has stabilised.
The next cash rate decision will be handed down on 24 September.
