The Reserve Bank of Australia left its main policy rate, the cash rate, on hold at 3.60 percent at its meeting today, in line with the consensus forecast. This follows the 25 basis point reduction in this rate at its previous meeting in August.

In the statement accompanying today's decision, officials noted recent declines in inflation but also referred to weak productivity growth and"indications that inflation may be persistent in some areas". Stronger household spending was also cited as a factor that"may make it easier for businesses to pass on cost increases".

Reflecting these considerations, officials concluded that"it was appropriate to remain cautious" at today's meeting. They again noted that monetary policy is well placed for them to respond decisively if external factors weigh on domestic economic conditions. The statement also shows that today's decision was unanimous, perhaps suggesting that it is unlikely a majority of members will support a rate cut at then next meeting scheduled to be held in November.

A hot inflation reading has put any more rate cuts on the shelf, likely until 2026.

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.