At the December board meeting the Reserve Bank of Australia (RBA) has left the cash rate unchanged at 4.35%.
The cash rate has remained at a 12-year high since the most recent hike in November 2023, an elevated level aimed at taming inflation.
In its decision, the board admitted while inflation had fallen since its peak in 2022, it was still too high.
“The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026,” it said.
“The Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts, but risks remain.”
Heading into the new year, the Board said it would pay “close attention” to developments in the global economy in its risk assessments.
“The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome,” it said.
The hold was widely predicted by economists, with all 44 of those polled by Reuters last week predicting the move.
The majority now expect the first cut in the June quarter next year, a departure from the November survey when the first three months of 2025 was the more popular pick.
Meanwhile, other central banks around the world have begun easing borrowing costs, but the RBA maintains Australia did not take rates as high as its peers and the employment market has proven unusually strong.
What can you do whilst you’re waiting for rates to drop?
Very simple. Take 5 minutes to phone a lending specialist. Having your home loan reviewed can help you ensure you’re not paying too much.
Some options we can help you explore include refinancing (which could mean increasing the length of your loan and decreasing monthly repayments), debt consolidation, or building up a cash buffer in an offset account.
If you’re keen to switch and save, get in touch with one of our local specialists today. Understanding your options can start with a simple phone, web, or in person discussion.
We make refinancing simple.
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.