Australian Central Bank Holds Rates Steady, Signals Caution on Inflation

Australia's central bank leaves its interest rate unchanged at 4.10 percent, since inflation has fallen to a level within the framework of the inflation target of 2-3 percent. But the tone of the interest rate statement is interpreted as hawkish by the market.

» Published: April 01 2025

Australian Central Bank Holds Rates Steady, Signals Caution on Inflation
Photo: Mark Baker AP/TT

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The Central Bank of Australia points to great uncertainty regarding economic activity and inflation due to international developments.

The bank sees risks both on the upside and downside when it comes to future inflation.

The interest rate decision comes ahead of what is expected to be a new announcement on tariffs from US President Donald Trump on Wednesday, where most countries around the world expect to be hit by a new type of retaliatory tariffs for everything the Trump administration defines as trade barriers for American companies – including national VAT rates in other countries.

The decision is interpreted hawkishly on the market, where the probability of an interest rate cut at the next meeting in May falls from around 80 to around 70 percent in pricing.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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