Reserve Bank of Australia halts Official Cash Rate hikes

The Reserve Bank of Australia (RBA) has paused interest rate hikes leaving the official cash rate on hold at 3.6 per cent this afternoon.

The decision comes after 10 months of consecutive interest rate rises since May last year, increasing variable repayments on homes by tens of thousands of dollars.

New Zealand’s Reserve Bank is widely expected to hike the OCR by 25 basis points tomorrow, (at 2pm) taking it to 5 per cent.

While there have been some calls for a pause here, amidst signs of an economic downturn, evidence of slowing inflation is not yet as pronounced as across the Tasman.

There are also expectations that the rebuilding after the weather of late summer may add a last burst of inflation pressure.

The pause by the RBA ends the fastest-tightening cycle on record in Australia, with an increase of 350 basis points delivered in less than a year.

The ABS last month released a report for February that found that inflation had been somewhat reduced.

Inflation is 6.8 per cent in Australia for the 12 months to February, down considerably since January’s stark 7.4 per cent.

Experts and economists had been divided over today’s decision, with some tipping a 25 basis point increase.

In New Zealand, the inflation rate for the year to December 2022, is still 7.2 per cent. Data consumer price inflation is only released every three months here.