174 The RBA highlighted that economic data received since November aligns with expectations, offering a rationale for keeping rates unchanged at the 12-year high. While there were market expectations for a steady outcome due to a slightly softer-than-expected inflation in October, the possibility of a rate increase in the new year remains on the table. Following the announcement, the local Australian dollar experienced a 0.5% decline to $0.6581, and three-year Australian government bond yields eased by 5 basis points to 3.995%. Investors adjusted their expectations, trimming the likelihood of a rate hike in the new year to 38% by March, compared to the earlier estimate of 43% before the decision to maintain the status quo. RBA Governor Michele Bullock emphasized the decision to keep the cash rate steady allows the bank to evaluate the impact of previous interest rate increases on various economic indicators, including demand, inflation, and the labor market. The necessity for further monetary tightening will be contingent on evolving data and risk assessments. Having recently taken the helm in September, Governor Bullock has underscored her commitment to combatting inflation by raising interest rates by a quarter point last month. She expressed concerns about inflation expectations becoming unanchored and emphasized the need for a more substantial response from interest rates, especially as inflation appears increasingly driven by domestic demand. This decision comes as a relief to mortgage holders, providing a pause in rate hikes just before Christmas. Many borrowers have been grappling with elevated living costs, with monthly mortgage payments surging by more than A$1,000 ($662). This marks the last opportunity for the RBA to adjust rates before February, offering a respite to households during the holiday season. In a widely anticipated move, the Reserve Bank of Australia (RBA) opted to maintain its current interest rates at 4.35%, marking the conclusion of its December policy meeting. This decision provides the central bank with additional time to evaluate the economic landscape and make informed decisions regarding potential rate hikes in the coming year. The RBA highlighted that economic data received since November aligns with expectations, offering a rationale for keeping rates unchanged at the 12-year high. While there were market expectations for a steady outcome due to a slightly softer-than-expected inflation in October, the possibility of a rate increase in the new year remains on the table. Following the announcement, the local Australian dollar experienced a 0.5% decline to $0.6581, and three-year Australian government bond yields eased by 5 basis points to 3.995%. Investors adjusted their expectations, trimming the likelihood of a rate hike in the new year to 38% by March, compared to the earlier estimate of 43% before the decision to maintain the status quo. RBA Governor Michele Bullock emphasized the decision to keep the cash rate steady allows the bank to evaluate the impact of previous interest rate increases on various economic indicators, including demand, inflation, and the labor market. The necessity for further monetary tightening will be contingent on evolving data and risk assessments. Having recently taken the helm in September, Governor Bullock has underscored her commitment to combatting inflation by raising interest rates by a quarter point last month. She expressed concerns about inflation expectations becoming unanchored and emphasized the need for a more substantial response from interest rates, especially as inflation appears increasingly driven by domestic demand. This decision comes as a relief to mortgage holders, providing a pause in rate hikes just before Christmas. Many borrowers have been grappling with elevated living costs, with monthly mortgage payments surging by more than A$1,000 ($662). This marks the last opportunity for the RBA to adjust rates before February, offering a respite to households during the holiday season. You Might Be Interested In Prudential Closes Hong Kong Wealth Management Unit Pulse Hong Kong’s Economy ‘should fare better for rest of the year’ Mubadala and Saudi Fund Deals on US Radar, Potential China Angle Explored Biogen and Ionis Discontinue Development of Investigational Drug for ALS Report: US Crypto Super PACs Raise Over $100 Million Qatar’s Free Zones Authority joins with Development Bank to enhance investment climate