Reserve Bank of Australia Holds Rates Steady Amid Rising Trade War Risks

The Reserve Bank of Australia (RBA) kept its cash rate unchanged at 4.1% in today’s policy meeting, aligning with market expectations.

The decision to hold rates follows a 0.25% cut in February—the first policy easing in over four years—amid concerns about the rising risk of a global trade war.

Policymakers emphasized that monetary policy remains well-positioned to respond to international developments, stating they need clear evidence that core inflation is under control before considering further action.

However, today’s statement carried a slightly dovish tone, as the central bank omitted previous references to caution about further rate cuts and the persistence of upside inflation risks.

Governor Bullock clarified that the board did not discuss a rate cut this time. While the dovish shift in language was noted, it does not signal an imminent easing in May, as labor market tightness remains a key factor in the decision to wait for more data on employment and inflation.