Australia's central bank holds the line on rates even as others ease
RBA keeps policy rate at 12-year high of 4.35%
Underlying inflation remains too high, central bank says
Reiterates it is not ruling anything in or out on policy
Adds quotes from Governor Bullock in paragraphs 13-14, analysts 18-20
By Stella Qiu and Wayne Cole
SYDNEY, Nov 5 (Reuters) -Australia's central bank held interest rates steady on Tuesday, as expected, and cautioned policy would need to stay restrictive for some time yet, strongly suggesting borrowers could expect no Christmas cheer this year.
There was subdued market reaction, with the Australian dollar AUD=D3 hovering at $0.6595. Rate swaps point to a scant chance of a rate cut this year, with a first easing not fully priced in until May next year. 0#RBAWATCH
Wrapping up its November policy meeting, the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35%. It again repeated that it was not ruling anything in or out on policy, in a crucial paragraph that is largely similar to the one in September.
Once again, the central bank did not explicitly consider either a hike or cut in rates this time.
Markets have heavily wagered on a steady outcome as the labour market stayed surprisingly strong and third quarter core inflation was still a little sticky.
"While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high," said the board in a statement.
"This reinforces the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out."
The RBA has held its policy steady for a year, judging the current cash rate of 4.35% - up from 0.1% during the pandemic - is restrictive enough to bring inflation to its target band of 2-3% while preserving employment gains.
Its hawkish stance is in contrast to central banks in the U.S., euro zone, Britain, Canada and New Zealand who have cut rates as price pressures ease.
Australia's headline inflation slowed to 2.8% in the third quarter, back in the target band for the first time since 2021, but that was mostly due to government rebates on electricity bills. Underlying inflation came in at 3.5%, still some distance above the mid-point of the target.
The central bank's latest forecasts showed underlying inflation - a trimmed mean measure closely watched by the RBA - is expected to slow just a touch to 3.4% by year-end from 3.5% in the third quarter. It won't return to target until 2026.
The RBA lowered its GDP forecast to 1.5% by the year-end, from 1.7%, in part reflecting soft household consumption. It also trimmed its estimate for next year to 2.3%, from 2.5%.
When asked about the prospects of near-term rate cuts at a post-meeting press conference, Governor Michele Bullock said she wanted to steer clear of that.
"What I would say is that I think at the moment we have got the right settings ... We will try to make sure that we're tuned in enough that if things start to turn down more than expected, we're ready to act. But we don't know."
The economy barely grew in the last few quarters but the labour market somehow has stayed surprisingly strong with employment gains averaging 3.1% over the past year, twice the U.S. rate. The jobless rate stayed low at 4.1%.
All that means is that a rate cut this year is looking unlikely, making the RBA one of the last few central banks to ease policy.
In a separate statement on monetary policy, the RBA made a point of saying that financial conditions in Australia were still not as tight as in most other developed countries even after recent rate cuts there.
Shane Oliver, chief economist at AMP, said the RBA's rates guidance is now neutral, adding that comments from Bullock were less hawkish. Notably, Bullock declined to reiterate that cuts were unlikely in the near term.
"RBA would still probably prefer to wait for confirmation of the downtrend in underlying inflation in December quarter inflation data due at the end of January," said Oliver, who tipped for a rate cut in February.
"We doubt that the RBA will have to wait all the way out to May to be confident enough on inflation to start cutting."
Australia cash rate in Nov. 2024 https://reut.rs/3YD9TH8
Reporting by Stella Qiu and Wayne Cole; Editing by Jacqueline Wong
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إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.
جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.
أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.
