The Reserve Bank of Australia today left its main policy rate, the cash rate, unchanged at 4.10 percent for the fourth consecutive meeting, in line with the consensus forecast. Today's meeting is the first presided by incoming Governor Michele Bullock, but her experience as a senior RBA official for many years suggests there will be continuity in the RBA's approach to policy and its governance under her leadership.

In the statement accompanying today's decision, officials argue that inflation"has passed its peak but is still too high and will remain so for some time yet". Monthly CPI data published last week showed an increase in headline inflation from 4.9 percent in July to 5.2 percent in August, mainly reflecting higher fuel prices. The measure of underlying inflation, however, fell from 5.8 percent to 5.5 percent, closer to the RBA's target range of two percent to three percent. Officials remain confident that inflation will fall towards their target range over the forecast period but again highlighted upside risks to the inflation outlook

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.

Repeating that inflation had"passed its peak", the RBA left rates unchanged at their September meeting. For the October meeting, the bank is expected to keep rates unchanged despite an uptick in August headline inflation.

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.