RBA keeps the official cash rate on hold at 3.85%
Jonathan Barrett
The Reserve Bank has surprised experts by keeping rates on hold, defying widespread expectations of a reduction.
A potential cut in August will now rely on whether quarterly consumer price data due out at the end of the month shows inflation is under control.
Key events
Treasurer says he doesn’t ‘second guess’ Reserve Bank’s decisions after interest rates left on hold
Treasurer Jim Chalmers has been speaking after the RBA’s decision to leave interest rates on hold at 3.85%.
At a press conference in Canberra, he said:
I don’t second guess decisions taken independently by the bank or its board. I don’t make predictions or pre-empt future movements in interest rates.
Chalmers would not be drawn on whether he believed the central bank’s board had made the correct decision or not.
Asked by a reporter if he could “just be frank” on whether it was his “personal opinion that the board got this call wrong”, Chalmers said:
I don’t express those sorts of opinions when it comes to decision taken independently by the Reserve Bank.
And there’s a good reason for that. And the reason is I’ve got my own job to focus on. The Reserve Bank – its board and its governor – has its own job to focus on.
Catie McLeod
Hi, I hope you’ve had a good day so far. I’ll take you through the rest of this afternoon’s news.
Rafqa Touma
Thank you for joining us on the blog today. Handing over to Catie McLeod who will keep you posted this afternoon.
Treasurer says result not what was hoped for by millions of Australians
Jim Chalmers says the Reserve Bank’s decision to leave interest rates on hold at 3.85% is “not the result millions of Australians were hoping for or what the market was expecting”.
Two interest rate cuts in five months this years comes with “substantial and sustained progress on inflation,” he said in a statement responding to the decision.
We’ve seen elsewhere that when central banks cut rates, they don’t always cut at every meeting.
The RBA has indicated the direction of travel on inflation and interest rates has been established.
Jonathan Barrett
RBA board waiting on ‘more information’ on inflation
The monetary policy board said in a statement that it could “wait for a little more information to confirm that inflation remains on track”.
“[The board] noted that monetary policy is well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia.”
Jonathan Barrett
Australian dollar up as RBA keep the official cash rate at 3.85%
The Australian dollar shot up immediately after the decision was announced to US65.5c, up from US65.15c minutes ago.
Jonathan Barrett
More on the RBA keeping the official cash rate at 3.85%
The decision has shocked markets, given traders had already priced in a rate reduction. Economists at all of the big four banks had expected the RBA to cut today.
The RBA board was split on the decision, with six voting in favour of keeping rates on hold, and three against.
RBA keeps the official cash rate on hold at 3.85%
Jonathan Barrett
The Reserve Bank has surprised experts by keeping rates on hold, defying widespread expectations of a reduction.
A potential cut in August will now rely on whether quarterly consumer price data due out at the end of the month shows inflation is under control.
Caitlin Cassidy
ANU stands behind plans to cut $100m in salaries
A spokesperson for ANU said after years of operating deficits, the vice-chancellor had “been clear” that the institution needed to achieve a break-even result in 2026.
This involves a significant reduction in our cost base of $250m, including $100m of salary costs … we are over halfway towards our salary savings target. But there’s still work to do.
The latest round of cuts comes after 41 positions were put on the chopping block in IT, information security and planning and service performance, representing up to 14% of the headcount for each area.
Since the Renew ANU process began last year, 210 people have left the university through earlier change plans and the Voluntary Separation Scheme.
The vice-chancellor of ANU, Prof Genevieve Bell, said ongoing consultations would run until the end of July.
We’ll take on and re-shape the final plans based on this feedback. We recognise this is an incredibly challenging time for our whole community.
Caitlin Cassidy
Planned student protests at ANU
Students at the Australian National University (ANU) have pledged to disrupt classes in protest against the university’s planned job cuts.
The latest round of cuts proposes to remove 59 positions in research and innovation, the college of sciences and medicine and the college of arts and social sciences as part of the Renew ANU restructure of the university.
The changes include a merger of the School of Music, School of Art and Design and Centre for Museum and Heritage Studies, and the merger of major degrees including political science, international relations, and public policies.
Lucy Chapman-Kelly, a co-convener of student group ‘No Cuts at ANU’ said students were angry and intended to cause “chaos and disruption” during the upcoming semester of classes:
Students have less choice in their degrees, while classes are only getting bigger and the quality of our education getting worse. The ANU is becoming a dumpster fire, there needs to be a massive change in who runs this university.
Caitlin Cassidy
Victorian government grants $5m to education providers
The Victorian government will inject $5m into education providers under its new ‘Yes to International Students Fund’ in a renewed push for the federal Labor government to axe international student caps.
The funding will have to go towards transnational education projects, where a university or TAFE may set up a campus offshore or runs courses with an international institution.
The minister for economic growth and jobs, Danny Pearson, visited William Angliss Institute today to announce the 16 education providers that would share in the funding.
Among them is La Trobe university, who will use their grant to offer study tours for south-east Asian students, connect Chinese students with Victorian startups and pilot a business and IT training program in Thailand.
Pearson said as Australia’s “education state”, Victoria stood “against student caps and with our universities and TAFEs”.
We are backing international students because they drive jobs and the economy and boost Victoria’s global reputation.
PM confirms official visit to China next week
Tom McIlroy
Anthony Albanese has confirmed he is headed to China at the weekend, ahead of his second meeting with the country’s president, Xi Jinping.
During a campaign swing through Tasmania on Tuesday, the prime minister said he would visit three cities from Saturday, hoping to build business ties and talk up the digital economy and green energy. He is expected to be away for about a week.
“I look forward to going to Shanghai, Beijing and Chengdu, which I will visit from Saturday,” Albanese said.
China’s an important trading partner for Australia: 25% of our exports go to China. What that means is jobs, and one of the things that my government prioritises is jobs.
It will be his second visit to China as prime minister and comes after difficulty in locking in a meeting with US President, Donald Trump.
Albanese’s 2023 visit was a major step in normalisation of relations between Canberra and Beijing, after a years-long diplomatic freeze and trade sanctions worth more than $20bn.
Along with the foreign minister, Penny Wong, and trade minister, Don Farrell, Albanese has described the stabilisation of ties as a good thing for both countries and good news for Australian exporters trading in the region.
The opposition leader, Sussan Ley, was asked about Albanese’s trip on Tuesday. “It is an important visit, and it should underline the respectful relationship that we need to have with China,” she said. .
It should underscore the important people to people links that have built our country with Chinese Australians very much there, and I met many yesterday, and it should also underline that that respect is a two way street, and we expect respect to come both ways.
Australian shares seesaw ahead of Reserve Bank decision
The local share market has been gyrating between positive and negative territory amid tariff uncertainty and as traders wait for the latest Reserve Bank decision on interest rates.
The ASX200 began trading on Tuesday with a 17-point fall, then climbed 20.7 points into the green in the second hour of trading before sinking back slightly into the red.
At noon the benchmark S&P/ASX200 index was down 7.3 points, or 0.08%, to 8,582.2, while the broader All Ordinaries was down 4.5 points, or 0.05%, to 8,821.9.
Kyle Rodda, an analyst for Capital.com, said markets had received a “quick punch in the guts” as Wednesday’s US trade deal deadline approached.
Market participants were expecting a flurry of trade deals with trading partners, but so far only letters about tariffs on the likes of Japan, South Korea and South Africa had been announced.
But Rodda said there was merit to the idea this was all a negotiating tactic by the Trump administration designed to create urgency.
Closer to home, it is widely expected that the Reserve Bank will announce later on Tuesday afternoon that it is cutting the cash rate from 3.85%.
– Australian Associated Press
