Australia's central bank leaves rates unchanged at 4.1%

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A Sydney ferry passes the Opera House and skyline of the central business district area on May 12, 2020 in Sydney, Australia. The Reserve Bank of Australia held interest rates at 4.1% for a second month on Tuesday as the central bank buys time to assess the impact of previous hikes, while warning of further hikes in the future. This decision to hold rates steady comes as inflation in Australia slowed to 6% in the second quarter from 7% in the first quarter, but was still well above the RBA's stated target of 2% to 3%. Economists were divided on whether the Australian central bank would raise interest rates at this meeting, with a slim majority expecting a 25-basis point hike. "The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so," Governor Philip Lowe said in a statement. "In light of this and the uncertainty surrounding the economic outlook, the Board again decided to hold interest rates steady this month. This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook," he added.