Australia keeps key interest rate on hold

Published : 03 Oct 2023 07:43 PM

Australia left its key interest rate unchanged Tuesday, with new central bank governor Michele Bullock citing "uncertainty surrounding the economic outlook".

It is the fourth consecutive month that the Reserve Bank of Australia has held the rate at 4.1 percent, and the first rates decision under the leadership of Bullock, who took over two weeks ago.

The bank has raised rates by four percentage points since May last year in an effort to tame runaway inflation.

Bullock said inflation -- which fell to six percent in the June quarter -- had now "passed its peak" but was "still too high and will remain so for some time yet".

The bank's priority is to return inflation to 2-3 percent by late 2025.

"Inflation is coming down, the labour market remains strong and the economy is operating at a high level of capacity utilisation, although growth has slowed," Bullock said.

She said further rates rises could not be ruled out but that these would "depend upon the data and the evolving assessment of risks".