Australia’s central bank kept its benchmark interest rate unchanged at 3.85% on Tuesday, surprising markets that had expected a rate cut.
The Reserve Bank of Australia (RBA) said six of its board members voted to hold the rate steady, while three supported a cut. The rare split vote came at the end of the central bank’s two-day policy meeting.
Markets had widely expected a reduction to 3.60%, pointing to slowing core inflation and weaker consumer spending. Core inflation had recently eased to the middle of the RBA’s 2% to 3% target range.
Some investors also expected the RBA to cut rates as a precaution against risks from global trade tensions and uncertainty related to new U.S. tariffs.
The RBA said the majority of board members preferred to wait for more data to confirm that inflation is slowing before making any changes to policy.
