RBA keeps rates unchanged but says inflation 'too high'

6th Aug 2024 07:43

(Sharecast News) - Rate-setters Down Under kept policy unchanged but sounded a hawkish note on the outlook for rates.

The Cash Rate was kept at 4.35%, as anticipated by economists.

However, policymakers said underlying inflation was "too high", pointing out that it would be some time yet before it was sustainably in the target range.

"Data have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out," the monetary authority said in its policy statement.

On the flip-side, momentum in Australian economic activity had been "weak" with unemployment having risen.

There were also the lags in the effects of monetary policy, the RBA said, and there remained a "high" level of uncertainty around the overseas outlook.

The outlook for the Chinese economy had softened and had been reflected in commodity prices while the elevated geopolitical uncertainties might have implications for supply chains.