RBA Rates Announcement Feb 2024

06.02.24 | Marc Barlow | News

In a move that surprised few, the RBA today decided to maintain the official cash rate at 4.35% after its first monthly board meeting of 2024. 

The RBA’s steady approach follows December 2023’s decision to keep rates unchanged and comes on the heels of encouraging news on inflation released last week.

‘Inflation continued to ease in the December quarter,’ said the RBA today. 

‘Despite this progress, inflation remains high at 4.1%. Goods price inflation was lower than the RBA’s November forecasts. 

‘It has continued to ease, reflecting the resolution of earlier global supply chain disruptions and a moderation in domestic demand for goods.’

This easing is all welcome news for long-suffering Melburnians after a couple of tough years coping with a sharp rising cost of living and increases to the official cash rate, which were passed on by the banks and lenders. 

As the RBA targets the 23% range for inflation, it is showing signs of easing right now. For instance, petrol prices experienced a significant 5% drop in December 2023  (though actual prices at the pump are still relatively high). 

The CPI experienced a modest 0.6% increase in the last quarter of 2023, marking the lowest quarterly inflation uptick since March 2021. 

This shift brought the annual inflation rate down from 5.4% to 4.1%, a level not seen since the December quarter of 2021. Compare that to December 2022 when annual inflation was at a worrying 7.8%. 

Looking ahead, the consensus among major banks and experts points to 2024 as the year for a potential rate cut. 

Chief Economist Stephen Halmarick of the Commonwealth Bank anticipates 0.75% cuts in 2024, with another 0.75% expected in late 2025. 

Westpac leans towards an August rate cut, while NAB suggests November as the likely time frame. 

Australia’s Central Bank noted that the central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026. 

Meanwhile, some lenders like Macquarie, AMP, and BOQ have preemptively lowered home loan rates – anticipating a peak in the cash rate – the question of when the official cash rate will actually decrease remains uncertain. 


That said, predicting interest rate movements is inherently challenging. Just ask former RBA Governor Philip Lowe. 


However, the RBA added a caveat today, as you’d expect. 


While there are encouraging signs, the economic outlook is uncertain and the Board remains highly attentive to inflation risks.’

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