As expected, the Reserve Bank of Australia (RBA) decided to leave its cash rate target unchanged at 4.35% in Sep, for a seventh straight meeting, UOB Group economist Lee Sue Ann notes.

RBA to cut on 5 November

“The Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35% following its 24 Sep meeting, as expected, and continued to emphasize ‘the need to remain vigilant to upside risks to inflation’.”

“The latest RBA decision came a day before data showing inflation slowing to 2.7% y/y in Aug, from 3.5% y/y in Jul, in line with consensus forecast. It marked the lowest reading since Aug 2021.”

“Our base case remains for the RBA to cut on 5 Nov, though this will be a close call, and very much dependent on upcoming data releases till then, including labour market (due 17 Oct) well as 3Q24 CPI (due 30 Oct) readings.”