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The Reserve Bank of Australia (RBA) released its meeting notes today, November 19, 2024. They decided to keep the cash rate at 4.35%, the same rate they have had for the last eight meetings. This choice matches what many expected and shows that they are still worried about inflation in the economy.
Even though the overall inflation rate has decreased significantly, some underlying factors that drive prices up are still high. The RBA pointed out that they need to keep their monetary policy strict to help control inflation and bring it down to their target range of 2-3%.
The RBA noticed that households are spending more money in the third quarter, which is a good sign. However, they are concerned that this recovery in spending might not happen as quickly as they hoped. If household spending grows slowly, it could lead to lower economic output and impact job availability.
Although RBA board members said they don’t need to change the cash rate right now, they are still open to making changes in the future. They mentioned that they are not ruling out any option regarding adjustments to monetary policy, showing they will keep an eye on the situation.
The interest rate on Exchange Settlement balances was also left unchanged at 4.25%. Overall, these points show that the RBA is being careful as it works through economic challenges while trying to manage inflation effectively.
