5 Sep 2023
The Reserve Bank of Australia (RBA) Board has again decided to leave the cash rate unchanged at 4.10% at its September meeting.
September 2023 - Article provided by PSK's Chief Investment Officer Chris Lioutas.
The decision was expected given the RBA has hinted more recently that they are somewhat pleased with the downward trajectory in inflation and therefore appear to be comfortable with the level of the cash rate.
The statement was almost a carbon-copy of the August statement with two very subtle exceptions:
- An admission that inflation in Australia has passed its peak with the inflation indicator for July showing a further decline
- Increased uncertainty globally around the outlook for the Chinese economy due to ongoing stresses in the property market
The Board signed off with the usual commitment to returning inflation to target.
It looks likely the RBA is done with raising rates in this cycle as long as inflation keeps heading towards the range of 2-3%. There remains some risk that the pace of falls starts to slow in the period ahead. If this were to occur, we would expect the cash rate to remain at current levels for some time (ie. higher for longer).
This is also the last meeting presided over by Philip Lowe with Michele Bullock to take the reins from 18th September 2023.
Following their announcement, Australian equities, the AUD/USD, and Australian bond prices barely moved, confirming the expected result and little change in the statement.
As always, if you have any questions or your personal circumstances have changed please do not hesitate to contact your financial adviser
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