The Reserve Bank of Australia today left its main policy rate, the cash rate, unchanged at 4.10 percent for the third consecutive meeting, in line with the consensus forecast. Monthly CPI data published since the RBA's last meeting showed a fall in headline inflation from 5.4 percent in June to 4.9 percent in July, extending its downward trend and moving closer to the RBA's target range of two percent to three percent.

Today's meeting was the last before Governor Philip Lowe's six-year term expires. His replacement, Deputy Governor Michele Bullock, will begin her term just before the next meeting in early October. Her long experience at the RBA suggests she will deliver policy and governance continuity in coming months ahead of changes to the frequency and timing of policy meetings in 2024.

In the statement accompanying today's decision, officials judge that recent data show that inflation"has passed its peak" but they reiterate that it is"still too high and will remain so for some time yet". They note upside risks to services price inflation and the potential for high inflation expectations to become entrenched.

Officials also remain concerned about risks to the growth outlook associated with the substantial policy tightening they have already implemented over the last 18 months. They again note that the economy is currently growing below its trend rate and is expected to do so"for a while".

Reflecting this assessment, officials again reached the conclusion they reached last month that it is appropriate to leave policy rates on hold to"provide further time to assess the impact of the increase in interest rates to date and the economic outlook". They also reiterated that"some further tightening of monetary policy may be required"to return inflation to its target range in a reasonable timeframe" and reaffirmed that they"will do what is necessary to achieve that", depending on incoming data.

Saying that price pressures were moderating, the RBA, in contrast to expectations for a 25-basis-point rate hike, left rates unchanged in August for a second consecutive meeting. For its September meeting, the bank is expected to once again stay on hold.

The Reserve bank of Australia (RBA) announces its monetary policy with regard to interest rates on the first Tuesday of each month with the exception of January when it is on vacation. The RBA is the central bank of Australia and its duty is to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people. It does this by setting the cash rate to meet an agreed medium-term inflation target, working to maintain a strong financial system and efficient payments system.

The Reserve Bank of Australia's (RBA's) main responsibility is monetary policy. Policy decisions are made by the Reserve Bank Board with the objective of achieving low and stable inflation over the medium term. Other responsibilities include maintaining financial system stability, while at the same time promoting the safety and efficiency of the payments system. The RBA regards appropriate monetary policy as a major factor contributing to the Australian dollar's stability, which in turn leads to full employment and the economic prosperity for Australia.

The RBA is unique among the central banks - it has two boards with complementary responsibilities. The Reserve Bank Board is responsible for monetary policy and overall financial system stability. The Payments System Board has specific responsibility for the safety and efficiency of the payments system.

The RBA sets an interest rate at which it lends to financial institutions. This interest rate then affects the whole range of interest rates set by commercial banks and other institutions for their own savers and borrowers. It also tends to affect the price of financial assets, such as bonds and shares, and the exchange rate, which affect consumer and business demand in a variety of ways. Lowering or raising interest rates affects spending in the economy.

The level of interest rates affects the economy. Higher interest rates tend to slow economic activity; lower interest rates stimulate economic activity. Either way, interest rates influence the sales environment. In the consumer sector, few homes or cars will be purchased when interest rates rise. Furthermore, interest rate costs are a significant factor for many businesses, particularly for companies with high debt loads or who have to finance high inventory levels. This interest cost has a direct impact on corporate profits. The bottom line is that higher interest rates are bearish for the financial markets, while lower interest rates are bullish.