RBA Expected to Maintain 12-Year High Interest Rates Amid Banking Overhaul

The Reserve Bank of Australia (RBA) is anticipated to maintain interest rates at a 12-year high, focusing on policy changes during its first meeting of the year.

Economists expect the RBA to keep the cash rate at 4.35%, maintaining a hawkish stance due to lingering inflation concerns.

The RBA may resist near-term easing, aligning with global peers like the Federal Reserve, despite slower fourth-quarter CPI leading to market bets on rate cuts.

Data showing inflation slightly exceeding 4% has led to market bets on rate cuts, with analysts suggesting a more likely scenario in late 2024 or 2025.

Policymakers aim to return inflation to the 2 to 3 per cent target band, and the RBA is expected to retain a tightening bias, signaling the ongoing fight against inflation.

Government budget measures addressing cost-of-living concerns will play a crucial role in influencing the RBA's decisions.