Summary

• The Reserve Bank of Australia left rates unchanged at 4.35%, viewing inflation as sticky but broadly in line with its base case. This allows policy to remain restrictive and data dependent.
• While risks persist, easing global pressures and a gradual slowdown support expectations the RBA will stay on hold for now. That shouldn't prevent AUD gains in 2H.
• While the economy is cooling, underlying inflation remains elevated, reinforcing the need for continued policy restraint.

By Deepali Bhargava, Regional Head of Research, Asia-Pacific and Francesco Pesole, FX Strategist

RBA Policy Reaction: Hold at 4.35% in line with expectations

The Reserve Bank of Australia (RBA) left the cash rate