Our banking system is strong, we have our lowest unemployment rate in decades, the prices of many of our exports are very high and many households saved a lot of extra money during the pandemic. At the same time, many households are feeling a painful squeeze on their budgets.
Inflation is too high, although it is coming down due to both the resolution of some supply-side problems and the RBA’s earlier tightening of monetary policy. This month, the Board decided to hold the cash rate steady after increasing interest rates at the previous 10 meetings. This will provide more time to assess how the various influences on the economy balance out.