The Reserve Bank has kept the cash rate on hold in a move that will disappoint borrowers hoping for further mortgage relief.
The surprise decision went against expectations of most traders and economists, who were leaning towards a 25 basis point cut to reflect under-control inflation and sluggish retail spending.
Yet the enduringly strong jobs market and home prices trending higher suggest the economy is still in decent shape, proving enough to keep the central bank cautiously on the sidelines for a bit longer.
The RBA board said maintaining price stability and full employment was the priority.
“The board judged that it could wait for a little more information to confirm that inflation remains on track to reach 2.5 per cent on a sustainable basis,” the post-meeting statement read.
“It noted that monetary policy is well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia.”
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