Australia’s central bank, the Reserve Bank of Australia (RBA), has signaled potential rate cuts in the coming months while maintaining a cautious stance on further monetary easing. The decision, announced on February 18, 2025, comes amid slowing inflation and concerns about global economic uncertainty.

RBA Governor Michele Bullock emphasized the need for a balanced approach, stating that while rate cuts could provide relief to households and businesses, the bank must remain vigilant against inflationary risks. The RBA’s benchmark interest rate currently stands at 3.85%, following a series of hikes in 2023 and 2024.

Economists predict that the RBA could cut rates by 25 basis points in the second quarter of 2025, with further easing contingent on economic data. The Australian dollar weakened slightly following the announcement, reflecting market expectations of a dovish shift in monetary policy.