The Reserve Bank of Australia has maintained its interest rates at 4.1%, deciding not to adjust amid the heated election period. This move keeps the central bank on the sidelines.

Accompanying this decision, the monetary policy board expressed increased certainty that inflation is nearing its target rates, despite remaining cautious about the future economic environment.

The bank noted a significant decline in inflation from its peak in 2022, attributing this to higher interest rates that have helped align aggregate demand and supply.

Recent data continues to suggest that underlying inflation is easing, in line with previous forecasts from the February Statement on Monetary Policy.

With growing concerns over international protectionism and potential trade wars, especially following Donald Trump’s tariff announcements, the RBA stands ready to address any increase in global economic uncertainty.

The Reserve Bank cautioned against the impact of rising protectionism on global confidence, which could worsen if more countries adopt retaliatory measures.

Following February’s rate cut, the governor Michele Bullock advised against expecting immediate subsequent cuts, a guidance that several financial markets have heeded.

The markets leading up to the decision had allotted only a slim chance of a further rate cut, despite ongoing evidence of inflation retreating into the RBA’s target range.

The recent rate cut has provided a noticeable boost to the property market, with Australian house prices reaching a new peak as buyer demand increases.

Economists are now looking towards the next meeting on 19-20 May, with some predicting a possible second rate cut.

Expert opinion suggests that the government’s budget allocations are not expected to significantly affect inflationary pressures, leading the RBA to consider further monetary policy relief if global economic uncertainties intensify.

This decision represents the first meeting of the newly established monetary policy board and marks the first time board members were required to vote on interest rates individually.

The board comprises figures such as Marnie Baker, the former CEO of Bendigo and Adelaide Bank, and academic economist Renee Fry-McKibbin, who contributed to the review recommending the separation of the RBA board into interest rate-setting and governance functions.

Governor Michele Bullock will address the media at 3:30 PM Sydney time.