RBA keeps interest rates unchanged after 10 hikes
The Reserve Bank of Australia stood pat on interest rates on Tuesday following 10 hikes.
Rates were kept at 3.6%, in line with consensus expectations.
Bank Governor Philip Lowe said the decision follows a cumulative increase in interest rates of 3.5 percentage points since May last year.
"The board recognises that monetary policy operates with a lag and that the full effect of this substantial increase in interest rates is yet to be felt," he said. Lowe said the board had made the decision to hold rates steady "to provide additional time to assess the impact of the increase in interest rates to date and the economic outlook".
He noted that the outlook for the global economy remains subdued, with below-average growth expected this year and next.
"The recent banking system problems in the United States and Switzerland have resulted in volatility in financial markets and a reassessment of the outlook for global interest rates," he said.
"These problems are also expected to lead to tighter financial conditions, which would be an additional headwind for the global economy."
The RBA said some further tightening of monetary policy may be needed to ensure that inflation returns to its 2% to 3% target.
CMC Markets analyst Michael Hewson said: "In light of recent market turmoil, it’s not too surprising to see the Reserve Bank of Australia decide to take a pause when it comes to its own rate hiking cycle.
"That decision became a lot easier last week when a fall in headline inflation back to 6.8% in February suggested that the spike up to 8.4% in December may well have been a one-off giving policymakers’ confidence that a pause was appropriate."
TD Securities said: "The door has not been shut to hiking the cash rate again but the appetite to deliver another hike has been watered down compared with the March statement.
"If the Bank pauses again in May, then Aug is the next likely month the Bank could hike. However we anticipate the RBA is done hiking and forecast the cash rate remaining on hold at 3.60% this year before rates are cut from Q1 next year."