SBS News

The Reserve Bank of Australia (RBA) has handed down its interest rate decision.

The board left the cash rate on hold at 4.35 per cent, as was widely forecast by economists.

The RBA board predicts that inflation will remain above 2.5 per cent — the midpoint of its 2-3 per cent target range — until mid-2027.

"There continue to be heightened uncertainties about the outlook for domestic economic activity and inflation," it said in its decision statement.

The RBA has signalled that inflation could remain high "for some time", with disruptions to global oil supply directly contributing and indications higher fuel prices are passing on to the price of other goods and services.

The RBA 'shadow board' — an independent group of Australian economists — has recommended the cash rate target remain at 4.35 per cent, acknowledging a "difficult economic backdrop".

The body, hosted by the Australian National University, is not affiliated with the RBA and offers its own policy recommendations a day before the official RBA decision.