The Reserve Bank of Australia maintained its key interest rate for the third straight month at its final meeting of 2025, and the policy board observed that there are some signals of a more broadly based inflation uptick, some of which may be long-term and will need to be closely monitored.
The policy board governed by Michele Bullock decided to hold the cash rate at 3.60 percent, as widely expected, on Tuesday.
The bank had reduced the rate by 25 basis points each in August, May, and February. The current 3.6 percent is the lowest since March 2023.
“The risks to inflation have tilted to the upside, but it will take a little longer to assess the persistence of inflationary pressures,” the Bank said.
Domestic demand is showing some resilience, while the labor market conditions are still signalling little tightness, but further modest easing is expected.
The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.
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