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Investing.com-- The Reserve Bank of Australia remained on edge over future interest rate cuts amid sticky local inflation, the minutes of the central bank’s September meeting showed on Tuesday.
The RBA also largely reiterated its data-dependent stance on future rate cuts, noting that it was also waiting to see the full effects of its monetary easing to be reflected in the economy.
The RBA left its benchmark rate unchanged at 3.6% in late- September, and had flagged increased caution over a slowing decline in inflation. Strength in the labor market also sparked questions over just how much monetary easing was required.
RBA members noted that monetary policy was “probably still a little restrictive,” but were unclear over just how restrictive it was.
They noted that it was possible that the Australian economy was recovering faster than expected, especially in private consumption. But on the other hand, the RBA noted that it was also possible that weak consumer sentiment and softening inflation presented more economic risks.
This uncertainty saw the RBA come to the conclusion that a hold was appropriate in September, and that it would seek more cues on the economy from upcoming data.
September-quarter inflation data is expected to be among the RBA’s chief considerations, with the central bank bracing for an increase in inflation.
The RBA cut rates by a cumulative 75 basis points so far in 2025, as it moved to support local business activity amid increasing global economic uncertainty. Inflation falling within the RBA’s 2% to 3% annual range had also prompted some easing, although inflation was seen largely picking up in July and August.