🤯 Picked by our AI, this stock rallied more than Nvidia this month, yielding 94% since MarchSee the stock

RBA keeps interest rates steady, but tempers hawkish language

Published 03/18/2024, 11:41 PM
© Reuters.

Investing.com-- The Reserve Bank of Australia left interest rates unchanged as widely expected on Tuesday, and said that while inflation had moderated substantially in recent months, it still remained too high. 

But the central bank struck a somewhat less hawkish note in its policy statement than its prior meeting, no longer explicitly stating that interest rates could rise further. 

The RBA left its official cash target rate at 4.35%, leaving it on hold for a third straight meeting since November. The move was widely expected by analysts, as Australian inflation eased substantially over the past year.

RBA eases hawkish language 

But while the central bank warned that inflation remained high and was only set to fall within its target range by 2025, the RBA appeared to have somewhat tempered its hawkish language.

The central bank did not outright warn markets that interest rates could still rise further- a rhetoric it had explicitly stated during its January meeting. 

Instead, the bank said that it was “not ruling anything in or out” over the path to cooling inflation, which it said remained uncertain.

The RBA also flagged uncertainty over Australia’s economy, noting that growth had cooled during the December quarter. 

Analysts only expect the RBA to begin flagging potential interest rate cuts by the September quarter. 

ASX 200 rises, AUDUSD falls 

Australian stocks took some support from the RBA’s less hawkish language, with the benchmark ASX 200 index rising 0.2% after trading flat for most of the day.

But bigger gains in stocks were held back by caution before a Federal Reserve meeting this week, as well as a potentially historic policy shift by the Bank of Japan.

The Australian dollar retreated on the prospect of a less hawkish RBA, with the AUDUSD pair falling 0.3% after the RBA’s decision. 

The currency has lagged its Asian peers in recent sessions amid pressure from falling commodity prices and a less hawkish outlook for the RBA. 

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.