The Reserve Bank of Australia (RBA) kept monetary policy on hold Tuesday, a decision that was widely anticipated by the financial markets.
Officials voted to keep the overnight cash rate at a record low of 1.5%, where they’ve stood since August 2016.
When it comes to the statement, the RBA acknowledged that weak wage growth is likely to continue for the foreseeable future as inflation remains low. Policymakers also said that a stronger Australian dollar will continue to weigh down price pressures for the foreseeable future.
The Reserve Bank continues to maintain expectations for economic growth at an annual rate of 3%, but is concerned about the impact of a higher dollar on that estimate. Although there is no definitive timetable for when the central bank will shift interest rates, economists expect the next move will be a hike.
The Australian dollar was trading slightly higher following the policy decision, with the AUD/USD exchange rate climbing 0.1% to 0.7951.
Economists polled by Sky Business News recently had diverging views about the future of monetary policy. Of the 18 surveyed, four believe rates will remain on hold for the foreseeable future.
The RBA will hold its next policy meeting on October 3.