On December 10, 2024, the Reserve Bank of Australia (RBA) decided to maintain its cash rate at 4.35%, marking the ninth consecutive month without a change. This rate has been in effect since November 2023, indicating that the RBA does not anticipate any adjustments until at least 2025.
The RBA's decision reflects ongoing concerns about high underlying inflation, which remains at approximately 3.5%, despite a significant decline from its peak in 2022. The central bank's target inflation rate is set between 2% and 3%.
In its monetary policy statement, the RBA emphasized the importance of returning inflation to target levels sustainably within a reasonable timeframe. The bank noted that while headline inflation has decreased considerably, the underlying inflation continues to show momentum, thus remaining elevated.
Market analysts had largely predicted this decision, with expectations that the RBA might consider rate cuts in early 2025. Major Australian banks have informed customers that they foresee potential reductions in the cash rate during the first half of 2025.