RBAs decision to keep the interest rate the same. Is it a good thing?

The Reserve Bank of Australia (RBA) decided to keep the interest rate unchanged at 4.35% in August 2024. This decision comes amidst persistent inflation and a highly uncertain economic outlook. Although inflation has decreased significantly from its peak in 2022 (December 2022 - it was 7.8%) , it remains above the RBA's target range of 2-3%, currently at 3.8%.

The RBA's decision aims to provide stability in a volatile economic environment, helping to balance the demand and supply in the economy. This rate hold is expected to stabilize the real estate market, allowing buyers and sellers to make more confident and strategic decisions. However, the RBA remains vigilant and ready to adjust rates if inflation persists.

Economic growth has been sluggish, with low GDP growth and potential risks from global factors, such as economic developments in China and fluctuating commodity prices. The central bank aims to return inflation to its target range by late 2025 to mid-2026

Overall, keeping the interest rate unchanged provides a moment of stability for the market, although the economic outlook remains uncertain. The RBA emphasizes its commitment to returning inflation to target while closely monitoring economic and financial developments.