Reserve Bank of Australia holds steady, sees inflation risks
RBA keeps cash rate at 4.35%, warns of upside risks to inflation
SYDNEY, May 5 (Reuters) - Australia's central bank on Friday warned that risks to inflation were on the upside given strong consumer demand and rising labor costs.
RBA also notes uncertainty in economic outlook
The Reserve Bank of Australia (RBA) said in a statement after its monthly policy meeting that it would keep the cash rate at 4.35%, where it has been since November.
The RBA said that while the economy was continuing to grow, there was uncertainty in the outlook due to the war in Ukraine, the ongoing COVID-19 pandemic, and rising global inflation.
"The Board will continue to monitor developments in the global and domestic economies and adjust monetary policy as necessary to support sustainable economic growth and achieve the inflation target over time," the RBA said.
The RBA's decision was widely expected by economists, who had noted that the bank had been reluctant to raise rates too quickly.
Inflation in Australia has been rising in recent months, reaching 3.8% in June, the highest level in more than two decades.
The RBA has said that it expects inflation to return to its target of 2-3% over time as the economy slows.
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