RBA Holds Cash Rate at 3.6% Amid Inflation Concerns

The Reserve Bank of Australia held its official cash rate steady at 3.6 percent on Tuesday, signaling growing concerns over persistent inflation in a unanimous decision at its final monetary policy meeting of 2025.

The board, led by Governor Michele Bullock, noted that recent data pointed to a broader pickup in inflationary pressures, some of which may endure beyond temporary factors. "The data do suggest some signs of a more broadly based pickup in inflation, part of which may be persistent and will bear close monitoring," the RBA stated in its monetary policy announcement. Bullock told reporters the board did not consider a rate cut and discussed scenarios that could necessitate a rise in rates next year if inflation fails to moderate. The balance of risks to inflation has tilted slightly to the upside, she added, with the economy showing tighter conditions than previously estimated.

Headline inflation reached 3.8 percent in the year to October, the highest since mid-2024 and above the RBA's 2 to 3 percent target. Underlying measures, such as the trimmed mean, rose 3.3 percent, reflecting pressures in services and other areas after the expiration of state energy rebates in...