RBA leaves rates on hold for 5th consecutive meeting

On Melbourne Cup Day, 5 November 2024, the Reserve Bank of Australia (RBA) has announced another hold in the cash rate, leaving it at 4.35%.

The Melbourne Cup Day monetary policy meeting in 2023 marked the last time the RBA hiked interest rates, going up from 4.1 per cent to 4.35 per cent. The cash rate has now remained at this setting for 12 months and will likely remain there until the February meeting in 2025 at the earliest.

A hold was widely anticipated by the market, economists, and the broking industry despite the latest Consumer Price Index (CPI) data for the September quarter showing annual inflation had dropped into the RBA’s target band of 2-3 per cent, dropping to 2.8 per cent from 3.8 per cent in the previous quarter.

Underlying inflation, which strips out the biggest price swings, dropped to 3.5 per cent annually, from 4 per cent in the June quarter. This is still above the RBA’s target band of 2 to 3 per cent.

The RBA board said underlying inflation remained “too high” and was still “some way from the 2.5 per cent midpoint of the inflation target”. The board noted the latest forecast did not see inflation returning “sustainably” to this target until 2026.

“Sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority,” the board said.

“While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high.”

The board reiterated it needed to remain vigilant to the upside risks of inflation and was “not ruling anything in or out”.

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.

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.