Australia’s central bank holds interest at 4.1%, contrary to expectations

The Australian Central Bank fixed interest rates in July at 4.1%, against expectations of a 25 basis point hike to 4.35% levels.

In just two years, Australian interest rates jumped by 400 basis points, with inflation rising in the country and reaching in the fourth quarter of 2022 its highest level in 30 years at 7.8%, before slowing in the first quarter of 2023 to 7%.

“Further tightening of monetary policy may be required to ensure inflation returns to target within a reasonable time frame, but this will depend on how the economy and inflation develop,” RBA Governor Philip Lowe said in a statement.

The decision comes after the central bank raised the cash rate by 25 basis points last month, a move it described as a “finely balanced” decision, according to the minutes of its June meeting.