Australian borrowers can breathe a sigh of relief as the Reserve Bank of Australia (RBA) has decided to pause its interest rate hikes for the second time in the past 14 meetings. This move allows the central bank more time to assess the state of the economy, providing some respite for borrowers.
The RBA has left its official cash rate at 4.1 per cent, which still remains the highest level in 11 years. RBA governor Philip Lowe explained that the bank needed time to evaluate the impact of the previous four percentage points of rate hikes before making any further decisions.
“The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so.”
The decision to pause the rate hike was also influenced by the Australian Bureau of Statistics’ monthly consumer price index numbers, which showed a decrease in headline inflation to 5.6 per cent in May, the lowest in over a year.
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