Australia’s central bank held its cash rate steady at 4.35% as expected overnight, saying the economy was slowing in the face of tighter financial conditions, while warning that it might have to hike rates again.
Wrapping up its August policy meeting, the Reserve Bank of Australia board said it would do what was necessary to bring inflation back to its 2% to 3% target band, including increasing the cash rate target further if upside risks materialise.
The bank had already raised rates by 75 basis points since February as it struggled to contain stubborn inflationary pressures in the face of surging energy costs.
Markets had wagered on a steady outcome given inflation data had come in under forecasts in the second quarter, while the housing market had weakened more than policy makers had expected.