Australia central bank keeps rates steady at 4.35% as inflation remains
Michele Bullock, governor of the Reserve Bank of Australia (RBA), attends a news conference at the bank’s head office in Sydney, Australia, on Tuesday, Dec. 9, 2025. Australia’s central bank kept its key interest rate unchanged for a third straight meeting in a widely expected decision, while reiterating that future moves will hinge on incoming economic data. Photographer: Brendon Thorne/Bloomberg via Getty Images
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The Reserve Bank of Australia held rates at 4.35% Tuesday, while stating that it was ready to raise rates to manage price stability and full employment.
The unanimous move was in line with economists polled by Reuters, and comes even as Canberra fights to tamp down inflation in the country.
In its statement, the RBA said that inflation was “still too high,” warranting to keep the cash rate unchanged while it evaluates “the response to previous interest rate rises and the impact of the oil supply disruption.”
Earlier this month, Australia reported its GDP expanded by 2.5% in the first three months this year, year on year, missing expectations and at the same rate as in the prior quarter.
On a quarter-on-quarter basis, Australia’s GDP grew 0.3% compared with 0.5% forecast in a Reuters poll, and decelerating from 0.9% growth in the prior quarter.
While growth has been below expectations, inflation has run above the RBA’s target. While the April print softened to 4.2% on a year on year basis, it was still above the central bank’s target of 2%-3%.
“Higher fuel prices have added directly to inflation and there are indications that this is passing through to the prices of other goods and services, so inflation is likely to remain high for some time,” the RBA wrote.
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