Australia’s central bank, the Reserve Bank of Australia (RBA), is considering rate cuts in response to slowing inflation, while maintaining a cautious approach to further monetary easing. The announcement, made on February 18, 2025, underscores the RBA’s commitment to balancing economic growth with inflation control.
RBA Governor Michele Bullock emphasized the need for prudence, stating that while rate cuts could provide economic relief, the bank must remain vigilant against inflationary risks. The RBA’s benchmark interest rate currently stands at 3.85%, following a series of hikes in 2023 and 2024.
Economists predict a 25-basis-point rate cut in the second quarter of 2025, with further easing contingent on economic data. The Australian dollar weakened slightly following the announcement, reflecting market expectations of a dovish policy shift.
