RBA holds rates but warns hikes still possible amid high inflation

16th Jun 2026 07:38

(Sharecast News) - Australia's central bank held interest rates but warned that it was prepared to tighten monetary policy again if inflation persisted.

The Reserve Bank left its official interest rate on hold at 4.35% amid slowing economic activity slowed and unemployment hitting a four-year high.

Policymakers have hiked rates three times already this year and bank governor Michelle Bulloch stressed that "inflation remains too high".

"Today's decision does not rule out further tightening in monetary policy if that is what is required to bring inflation down. Leaving rates on hold today will allow the board to assess how these previous increases are flowing through the economy."

Bulloch broadly welcomed the Iran-US peace deal but warned the flow of commodities through the Strait of Hormuz and subsequent lower prices "could take some time, and an orderly resolution is still not assured, meaning there are still upside risks to inflation and downside risks to growth".

Reporting by Frank Prenesti for Sharecast.com