Interest rates might be at the peak of the cycle after the Reserve Bank of Australia (RBA) talked up the prospects of a slowing economy, while leaving rates on hold. The RBA on Tuesday kept interest rates unchanged for the fourth consecutive month, leaving the official cash rate at a 12-year high of 7.25 per cent, after its board meeting on Tuesday.
RBA governor Glenn Stevens said high petrol prices, as well as tighter financial conditions, were working to “restrain” domestic demand.
Interest rates rises by the central bank and commercial banks have led to subdued spending by consumers, while there has been a fall in labour markets, Mr Stevens said.
“On balance, while the inflation outlook remains concerning, the board’s assessment continues to be that demand growth will be moderate this year,” Mr Stevens said in a statement.
“Looking further ahead, inflation in both CPI and underlying terms should decline over time, provided demand continues to evolve as expected.”
Source: Nine News
